Condominium Coop and HOA Learn Insurance policy Top quality

I'm confident 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 learn ?cheap car insurance in houston texas insurance policy policy I have to pay the premiums to my agent or broker, and the top 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 top quality financing? That's a very good question, and it all comes down to 2 main ways that insurance coverage premiums are being charged:

Direct Bill
Agency Bill

Direct Bill

Most personal lines insurance policy policies, including personal automobile insurance, homeowners insurance coverage, renter's insurance and personal umbrella insurance plan are direct bill. This means that the insurance policies carrier is billing the policy holder directly. Most personal lines insurance 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 policy policy (of course he'll get a notice of cancellation if you don't pay your top quality and call you up to make sure that you'll make a payment so your policy shouldn't cancel). This is why on all your personal insurance coverage policies you pay the coverage company directly and you have the options of installments.

Agency Bill

But when it comes to your condo/coop or HOA's grasp insurance coverage policy it's a whole different story. Most condo/coop or HOA policies are agency billed, this means that the insurance carrier is billing the insurance 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 top quality to the insurance coverage carrier. This is the reason why you pay the insurance coverage premiums to the insurance coverage 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 top quality at once?

Top quality Financing

Most condo/coop or HOA associations don't have extra money lying around, so when your policy quality 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 coverage broker should help you out with the premium 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 quality, 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 top quality (minus your 20% down payment) to the insurance plan broker. Then the insurance policies broker sends to the insurance policies 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 guaranteed to have the policy paid up in full, whether by paying the full amount or by getting top 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 coverage company right away. This is wrong and illegal and you should stay away from such insurance coverage brokers.