Check By Web
August 29, 2008
CHECK BY WEB
By Bill Friend, Principal
PFA – Premium Finance Associates
In as little as just five years ago, Premium Finance Companies processed checks as they received them via US Mail or private currier. Companies and individuals paid as little as 27 cents to have their checks sent via US Postal Service, but also spent as much as $20 to have their checks over-nighted via private currier to avoid late charges or policy cancellation. The world has gotten quite a bit smaller lately thanks to the advancement of technology, especially via the Internet.
In most states, premium finance companies have enjoyed a 5% late fee per installment. On a $1,000.00 GL policy, with an installment of $100, that doesn’t sound like much. But when an insured has a policy premium of over $25,000, the potential fees from late charges can add up quickly.
If we were to take a 25% down payment from $25,000, we would have an $18,750 remaining balance to finance. And if we were to offer 9 installments over the 12 month policy period, we would have a monthly payment of $2,082.33, plus interest. Take this example of a $2,082.33 installment at a 5% late fee. That 5% late fee now becomes $104.17. Multiply that fee several times and you can now begin to see how late fees can add up in a hurry.
Many premium finance companies have adapted the Check-by-Web technology but do not promote it since late fees can contribute significantly to profit. PFA – Premium Finance Associates utilizes several national Online finance platforms for the convenience of the agent, broker and insured. The charge to utilize these services range from company to company. Some finance companies offer these services for free while other can charge up to $5.00 per payment. Payments can be accepted the same day provided they are received early afternoon. The alternative can be a $20.00 charge for an overnight and no guarantee the finance company will wave a late charge for a payment that is due that same day.
Access to the Online system and information can be used by the agent or broker via their user name and password into the premium finance company web site. The insured can access their account information by entering their account number and zip code when on the finance company website. Utilizing the Check-by-Web can save money, time and aggravation. The finance companies who offer Check-by-Web services are truly the most progressive in the industry.
Premium Finance Associates represents Several National Premium Finance Companies. We take a consultative approach because all premium finance companies are not equal. While some finance companies are competitive on larger premiums, they can be higher than normal on smaller premiums. Other finance companies will finance only standard General and Professional Liability policies while rejecting auditable Work Comp or Assigned Risk policies. We finance all markets and take the leg work out of premium financing to make it easy for agent/brokers. Why not let our National Companies compete for your business? Can we earn your business today?
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