Condominium Coop and HOA Learn Insurance policies Premium
I am certain that many condo/coop & HOA board members have the following question: how come on my Automobile & HO-6 Insurance policy policies I pay the premiums directly to the insurance coverage carrier, and I have the option of monthly installments, whereas on the condo/coop or HOA master ?http://bestinsuranceagencydirectory.com/texas/houston insurance policy policy I have to pay the premiums to my agent or broker, and the quality has to be paid in full upon binding of the policy and if I can't afford to pay it in full then we have to get quality financing? That's a very good question, and it all comes down to 2 main ways that insurance policies premiums are being charged:
Direct Bill
Agency Bill
Direct Bill
Most personal lines insurance plan policies, including personal automobile insurance coverage, homeowners insurance coverage, renter's insurance coverage and personal umbrella coverage are direct bill. This means that the insurance policy carrier is billing the policy holder directly. Most personal lines coverage policies come with the option of quarterly or monthly installments, you'll have to pay a down payment (usually 20%) upon binding, and the rest will be split up to quarterly or monthly installments. In most cases you'll be charged a small fee for every installment anywhere from $1 to $6 depending if you set up automatic withdrawals from your bank account. Once the policy is in effect, the agent or broker has nothing to do with the billing of your insurance policies policy (of course he'll get a notice of cancellation if you don't pay your high quality and call you up to make guaranteed that you'll make a payment so your policy shouldn't cancel). This is why on all your personal insurance policy policies you pay the insurance company directly and you have the options of installments.
Agency Bill
But when it comes to your condo/coop or HOA's grasp insurance policy policy it's a whole different story. Most condo/coop or HOA policies are agency billed, this means that the insurance policies carrier is billing the insurance policies broker the full policy premium, and the broker has to bill the condo/coop or HOA association. The broker usually has 30 to 90 days to pay the full high quality to the coverage carrier. This is the reason why you pay the insurance premiums to the insurance policy agent or broker and why it has to be paid in full. But what if your condo/coop or HOA association can't afford to pay the whole quality at once?
Quality Financing
Most condo/coop or HOA associations don't have extra money lying around, so when your policy premium is more than $20,000 it's kind of hard to pay the full amount up front, that's when top quality financing comes in to play. Your insurance plan broker should help you out with the top quality financing; there are a lot of good financing companies out there. The interest rates are usually between 6 & 10%. They will only finance about 80% of the premium, which means that you'll have to pay about 20% upon closing. How does the whole financing process work? The financing company sends a check of the full quality (minus your 20% down payment) to the insurance broker. Then the coverage broker sends to the insurance coverage company the down payment that he got from the condo/coop or HOA and the check that he got from the financing company (minus his commissions). Then the financing company is going to bill you monthly or quarterly with a 6 to 10% interest rate. The following is something that unfortunately happens quite often: The insured made positive to have the policy paid up in full, whether by paying the full amount or by getting high quality financing, and after a few weeks they get a notice of cancellation in the mail. What happened here? Very simple, your broker received the full amount, now he has up to 60 days to pay the company, and very often brokers neglect or on purposely delay paying the insurance coverage company right away. This is wrong and illegal and you should stay away from such insurance policy brokers.
