The last few months have been a real challenge for our society and a firm test of the human spirit. I truly hope that you and your family are safe and healthy. Our hearts go out to those who’ve lost a loved one or are still dealing with the impact of this pandemic. There are still many people who are hurting. I want to take this opportunity to thank all our partners who are helping us get through this difficult time. I believe that it will be increasingly more challenging in the days ahead. I want everyone to know that we will do whatever we can to help our customers. We’ve made a pledge to keep our doors open and continue to accept business with the most flexible payment terms possible. We are here to help you whether or not you’re a current customer. Feel free to contact us if you need help or advise on your situation. It is our obligation and desire to help others any way we can.
FLEXPAY is an exciting new workers’ compensation product. It combines the benefits of a premium finance agreement with the cash flow advantage of a Pay As You Go program. FLEXPAY is an ideal tool for insurance agents, wholesalers, or insurance carriers who are looking to offer their workers’ compensation clients a new and unique product.
How does FLEXPAY work?
- Payments are based on actual payroll
- Works with any payroll company
- Seamless integration with clients payroll system
- Self-Reporting option if there’s no payroll company
- Weekly, Bi-Weekly or Semi-Monthly payroll periods
- Down-Payment only 10%
- Commissions Paid Upfront
- Enhance Cash Flow for your insured
- Create new business opportunities
- WC Assigned Risk, Truckers, Restaurants, Non-profits, or any insured looking to reduce their DP or improve their cash flow.
Brien Volpe, CPCU
For the past 5 years we’ve been offering a program that allows an insured to finance their down payment premium. This cutting edge approach has enabled PFB to be the industry leader in this market space. Last year alone we financed over 1 million dollars of down payment or fully earned premium. If you have a client that’s in need of additional cash flow and would like to finance 100% of their insurance premium, we have a platform to make it happen.
One of the best reasons to work with Premium Finance Brokerage is our belief in representing multiple premium finance companies. We do not work for a premium finance company; we work for you to bring you the best in insurance premium financing. Last week I received a call from an agency I recently started representing with an unusual request. This agency wanted to premium finance a personal lines policy. The company currently working with my agency is not filed to premium finance personal lines. (Most finance companies do not premium finance personal lines) This personal lines homeowners’ policy was located in the Bahamas with an annual premium of just over $75,000. Luckily, Premium Finance Brokerage represents two finance companies that would premium finance this policy. I was able to get a premium finance contract and satisfy the needs of the agency. Happy agency owner and happy insured.
Ted Mast, AAI
Premium financing is a fairly standard product given the annual policy terms of the majority of liability, property, and automobile coverages. Construction wraps are being utilized more these days given the recovery from the recent recession. These products are usually written on a variation of annual terms and the amount of installments is important to allow for payments to be spread over the contract period. Having multiple premium financing sources allows PFB to find the best payment options for your insured
Jim Wright, CPCU
Premium Finance is the business of providing loans to consumers. Premium Finance, unlike a bank, provides an insured party the ability to cover the cost of general insurance premiums. Insurance premiums for both commercial and personal policies can be financed. The premium financing loan helps the insured alleviate the need for large up front capital costs normally associated with insurance premiums. The premium finance company provides payment in full to the insurance company who issued the policy. The insured pays the premium finance company on a monthly, quarterly, or semi-annual basis – these payments include any fees and/or finance charges associated with the loan. The premium finance company is given “power-of-attorney”. The power-of-attorney affords the finance company the right to cancel the insurance contract in the event of non-payment by the insured. The unearned portion of the insurance premium is also assigned to the finance company in the event of a return premium. This provides the finance company security (collateral) in the loan and helps to ensure repayment in the event of a default. Using the insurance policy as collateral is very similar to a consumer using his or her new vehicle as the collateral for the loan.
Brien Volpe, CPCU
Did you know that you can finance an agency fee? From time to time we’re asked if we can finance a fee that an agency charges their client. The simple answer is yes. The issue here is whether or not the fee is refundable. If the fee is refundable it can be financed, as long as, the agent agrees to return the unearned portion in the event the contract is canceled early. Typically, the finance company will ask the agent to sign an agreement that states they will return the unearned fee within 30 days of cancelation. By financing the agency fee it gives your insured increased flexibility with their down payment.
One of the significant benefits of working with PFB is the ability to access the most respected premium finance providers in the nation. We’ve partnered with markets that all share our core values of trust, honesty and integrity. As the largest premium finance aggregator in the country we have the tools to satisfy the needs of any client. We have accounts throughout the nation that range from a small dwelling fire policy to the general liability coverage of large multi-national corporations. Regardless of the premium size you can count on PFB to handle your transaction with care and professionalism.
Did you know that most D & O policies have a provision that makes them fully earned when there’s a change in ownership or dissolution of the board? You may have noticed over the years that the underwriting process for D&O coverage has become more stringent. Typically, when a company is sold or merged with another there are nondisclosure documents that prevent information from being shared with outside entities. When a premium finance company finds out about a change in ownership it’s always after the completion of the transaction. If the D&O policy is canceled there would be no return premium to cover the outstanding balance on the loan. Unfortunately, there’s no way to determine when or if this is going to happen during a policy period.
As the insurance market continues to harden we’ve recently had requests about financing smaller premiums with admitted insurance companies. One of signs in a changing marketplace is the availability of flexible direct bill options. About a month ago we financed a $1,500 property policy with a major national insurance carrier that was only willing to offer the client a quarterly payment plan. Since the insurance policy didn’t have any special cancellation provisions we were able to give them 15% down and 10 payments. This added flexibility enabled the client to have a lower initial out of pocket expense and a consistent monthly payment plan. As an added bonus the total finance charge on the contract was equal to the typical cost of direct bill.
From time to time we get asked why it’s so hard to finance an audit or prior balance. The reason is collateral. When an existing policy is canceled the return premium normally covers the outstanding balance on the loan. With an audit or prior balance there is no current policy that provides the collateral to pay off the loan in the event of cancelation. As a result, the loan is not secured by the unearned premium. Effective strategies that allow us to get this transaction done for our clients include:
1. Financing an existing policy with the audit
2. Pledge of assets by the named insured
3. Personal guarantee
4. Agency guarantee
Jarrettsville, MD 21084