What is the minimum delinquency charge specified in a premium finance agreement?

The minimum delinquency charge specified in a premium finance agreement is $1.00. This standard is important as it sets a baseline for what a lender can assess as a fee when a payment is late. Establishing this minimum helps to ensure that borrowers are aware of the potential costs associated with missed payments right from the start of the agreement. By implementing a standardized delinquency charge, the expectations are clear for both the lender and the borrower, promoting transparency and consistency in the financial process.

Other amounts may exceed this basic figure, but they are not required by the law, which aims to protect borrowers from unexpectedly high fees for minor lapses in payment timing. This delineation serves to encourage timely payments while avoiding excessive penalties that could harm the borrower's financial standing.