Premium Finance Consulting, LLC specializes in insurance premium financing consulting. Our founder, David Raymond, has more than 25 years of experience in the premium finance industry. Mr. Raymond has worked in various capacities, from co-founding his own premium finance company, to working in capacities such as CFO, COO, President, and now as a consultant.
What is Insurance Premium Financing?
There are two distinct types of insurance premium financing – the financing of property and casualty insurance policies and the financing of life insurance policies. We focus strictly on the financing of property and casualty policies.
When a property and casualty policy is sold, it can be paid for in several ways:
it can be paid in full at inception
many insurance companies offer an installment plan
an independent premium finance company can finance the policy, usually with a down payment and monthly installments
A number of insurance companies either do not provide their own installment programs or the payment terms that are offered are not as good as those offered by a premium finance company
Under the terms of the finance agreement which are generally regulated by state law, the premium finance company has a lien on the insurance policy and has the right to cancel the insurance policy if the borrower defaults. If the finance company cancels the policy, the insurance carrier, which was paid the total premium at the inception of the policy, must refund the unearned premium to the finance company. Upon receipt of the unearned premium, the finance company applies it to the loan balances which in many cases can pay off all or most of the outstanding balance on the loan.
Most premium finance contracts are financing commercial insurance policies. Premium finance loans can range from less than $1,000 to multi-million dollars.