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Premium Finance - How it Works

A Premium Financing Company provides loans for the financing of insurance premiums

Premium financing involves the lending of funds to an insured to cover general insurance premiums for both, commercial and personal policies. Premium financing on commercial policies alleviates the need for companies to incur up front capital costs associated with insurance premiums. For personal policies it addresses the need for the consumer to incur significant up front expenditures.

In most cases a loan is required for annual insurance policies. The funds loaned by the Premium Finance Company are paid off through monthly payments by the insured. The Premium Finance Company forwards the full premium amount to the insurance carrier who issues the policy. The Premium Finance Company collects the monthly payments which include the premium plus the financing fees from the Insured.

In summary, the Insured enters into a contract with the Premium Finance Company to repay the amount of the insurance policy premium, plus the finance charge for loaning the money that is forwarded to the Insurance Company. By entering into the contract, the insured provides the Premium Finance Company with the power-of-attorney (the right) to cancel the insurance policies in the event of monthly payment default to the Premium Finance Company. The Insured also assigns the unearned insurance premium refund to the Premium Finance Company. This provides the Premium Finance Company with the security of having the loan balance repaid.

Similarly as with any contract, if the insured defaults on a monthly payment or wishes to cancel the insurance policy, appropriate procedures have to be initiated. This includes appropriate reminder notifications to the insured as well as policy cancellation statements and premium refund requests from the insurance carrier.

Our Services

The MicRoe Premium Finance Advantage
    • Our ONLY business is Insurance Premium Financing
    • We finance premiums as low as $500 to amounts over $100,000
    • Competitive Rates
    • We provide both COMMERCIAL and PERSONAL lines financing
    • Customized software and internet quoting available
    • Bilingual staff supporting your customers and agency with fast, friendly service
    • Professional and knowledgeable staff
    • Our personnel take pride in our Company, the services we offer and the high ethical standards we abide by

Advantages and Benefits to the insured
    • Improved Cash Flow
    • Off balance sheet financing
    • Enhanced plan flexibility
    • "One stop shopping"
    • Flexible delinquency options
    • Favourable rate options
 

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