Commercial insurance is usually billed for the whole policy term up front. For a trucking company or a small business, that can be a large check to write on the day coverage starts. Premium financing spreads that cost out, so you can start coverage now and pay over time.

The three parties

  • You, the insured — the business buying the policy.
  • Your insurance agent — who places the policy and prepares the finance agreement with you.
  • The premium finance company — National Premium Finance Company (NatPrem), which pays the insurance company for you.

Step by step

  1. Your agent quotes the policy and offers to finance the premium.
  2. You sign a premium finance agreement. It shows the amount financed, the down payment, the finance charge, the number of payments and each payment's amount and due date. Read it before you sign — these figures are disclosed on the agreement.
  3. You pay the down payment, usually through your agent.
  4. NatPrem pays the insurance company the financed balance, and your coverage is paid for.
  5. You make your monthly payments to NatPrem until the balance is paid.

Why the policy is the collateral

A premium finance loan is secured by the unearned premium on your policy. That is why you do not need a house or equipment as collateral, and why approval is usually quick. It is also why missed payments matter: if the loan is not paid, the finance company can ask the insurance company to cancel the policy and return the unearned premium to pay down the loan. (See what happens if you miss a payment.)

Is premium financing regulated?

Yes. In Texas, premium finance companies are licensed by the Texas Department of Insurance under Chapter 651 of the Texas Insurance Code. NatPrem holds Texas premium finance license No. 3036548. The law sets out what a premium finance company may charge, how notices must be sent before a policy is cancelled, and how refunds are handled.

When it makes sense

  • You want to keep cash in the business for fuel, payroll or repairs.
  • Your premium is due all at once and your insurance company does not offer a payment plan that fits.
  • You are adding trucks or coverage mid-year and need the new policy in force now.

Talk to us

Ask your insurance agent to finance your premium with National Premium Finance Company, or get an estimate first. Questions? Call (214) 586-3155 or contact us. Hablamos español.