The COST Program™ is a turnkey operation that enables your premium finance company to be up and running quickly, allowing you to remain focused on your core business. Once you form the company (with our guidance on the type of company required by applicable state laws), we will assist in the licensing process in the state(s) necessary for operation. COST furnishes all customized forms needed for the company’s operation, including: the premium finance agreement and disclosure statement, monthly billing statement/coupon book, late notice, cancellation notice, and reinstatement notice.
Additionally, we prepare all the required license applications, configure our online quoting and account status system to fit your needs, and train your personnel on both it and the premium finance process in general. COST also configures the online insured system to enable borrowers to check their account status and make payments electronically. For most clients who are already arranging financing through outside sources, the transition is seamless.
We can also make introductions to banks for lines of credit, if needed, or work directly with your existing bank to explore potential funding options. Premium financing, properly structured, is a very secure form of lending. Assuming adequate down payment is collected, at any time during the life of the loan sufficient collateral in the form of the unearned premium should exist to cover the loan balance in the event of default – minimizing risk.
In addition to the added revenue your premium finance subsidiary will generate, owning your own premium finance company gives you the flexibility to service your policyholders with minimal risk. Premium finance loans are secured by the down payment and each loan is structured so that if the borrower defaults during the repayment period the insurance policy is cancelled and more than sufficient unearned premium should remain to pay off the loan (assuming appropriate down payment was secured at the time of booking). Because you control the process, you have the flexibility you need in interest rates, payment terms, and application of fees that can help you close (or save) a deal.
COST will establish on your behalf a deposit-only bank account specifically for your premium finance company into which COST will deposit all premium payments from insureds and return premiums from insurance companies and other sources. Your customers make their payments payable directly to your premium finance company, and we deposit these funds daily into your finance company’s bank account. COST maintains NO signature authority on any client account, and for additional security and peace of mind we carry both Fidelity and Insurance Premium Finance Company E & O coverage.Payments can be received via lockbox service if desired.