I’m sure that a lot of condo/coop & HOA board participants have the following question: how come on my Automobile & HO-6 Insurance insurance policies I pay the premiums directly to the insurance plan carrier, and I have the alternative of month-to-month installments, whereas on the condo/coop or HOA master insurance plan coverage I have to pay the premiums to my agent or broker, and the premium 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 rate financing? That’s a very properly question, and it all comes down to 2 essential approaches that insurance premiums are being charged:
Most private lines insurance policies, including non-public car insurance, house owners insurance, renter’s insurance and personal umbrella insurance are direct bill. This skill that the insurance plan service is billing the coverage holder directly. Most private lines insurance policies come with the choice of quarterly or monthly installments, you may have to pay a down fee (usually 20%) upon binding, and the rest will be split up to quarterly or month-to-month installments. In most cases you may be charged a small price for every installment anywhere from $1 to $6 depending if you set up automatic withdrawals from your financial institution account. Once the coverage is in effect, the agent or broking has nothing to do with the billing of your insurance plan coverage (of route he’ll get a be aware of cancellation if you do not pay your top class and name you up to make certain that you’ll make a price so your coverage mustn’t cancel). This is why on all your non-public insurance plan policies you pay the insurance organization without delay and you have the selections of installments.
But when it comes to your condo/coop or HOA’s master insurance coverage it is a complete distinctive story. Most condo/coop or HOA policies are agency billed, this capability that the insurance service is billing the insurance dealer the full coverage premium, and the dealer has to invoice the condo/coop or HOA association. The broking commonly has 30 to ninety days to pay the full premium to the insurance carrier. This is the purpose why you pay the insurance premiums to the insurance plan agent or broker and why it has to be paid in full. But what if your condo/coop or HOA association can’t manage to pay for to pay the total premium at once?
Most condo/coop or HOA associations do not have greater money lying around, so when your policy premium is more than $20,000 it’s type of challenging to pay the full amount up front, it truly is when premium financing comes in to play. Your insurance plan broker should assist you out with the top class financing; there are a lot of exact financing corporations out there. The interest charges are commonly between 6 & 10%. They will only finance about 80% of the premium, which ability that you will have to pay about 20% upon closing. How does the total financing method work? The financing agency sends a check of the full top class (minus your 20% down payment) to the insurance plan broker. Then the insurance plan broking sends to the insurance plan employer the down fee that he obtained from the condo/coop or HOA and the test that he obtained from the financing corporation (minus his commissions). Then the financing agency is going to invoice you month-to-month or quarterly with a 6 to 10% pastime rate. The following is something that unluckily happens quite often: The insured made sure to have the coverage paid up in full, whether or not by paying the full amount or by getting top rate financing, and after a few weeks they get a observe of cancellation in the mail. What occurred here? Very simple, your broker acquired the full amount, now he has up to 60 days to pay the company, and very regularly brokers overlook or on purposely prolong paying the insurance corporation right away. This is wrong and unlawful and you need to remain away from such insurance brokers.
Izzy Green, CEO and co-founder of Evergreen Insurance, In working with actual property owners and managers, Izzy noticed a need for a organization that is familiar with the desires of now not solely normal insurance plan merchandise but insurance for real estate owners, managers and board members. His success in real property and insurance gave him the natural aggressive aspect in addressing these wants and so Izzy and his companion launched Evergreen Insurance that specializes completely in actual estate insurance and nothing more. Evergreen fast grew to become chief in real estate insurance plan and Mr. Green is considered a main specialist in real estate insurance amongst board contributors and managing agents. Izzy writes articles on actual estate insurance and is a regular contributor to leading publications and also offers educational seminars to board members, managing dealers and insurance firms.