12. a. Delinquency charges. A premium finance agreement may provide for the payment by the insured of a delinquency charge of $1.00 to a maximum of 5% of the delinquent installment but not to exceed $5.00 on any installment which is in default for a period of 10 days or more, except that, if the loan is primarily for other than personal, family or household purposes, the delinquency charge may be 1.5% of the amount of the delinquent installment, but there may be a minimum delinquency charge of $25. If the default results in the cancellation of any insurance contract listed in the agreement, the agreement may provide for the payment by the insured of a cancellation charge; such charge shall be $5.00, less any delinquency charge on the installment in default.
b. A delinquency charge under this section may be collected only once on any installment, however long it remains in default. A delinquency charge may be collected at the time it accrues or at any time afterward.
c. No delinquency charge may be collected under this section on an installment which is paid in full within 10 days after its scheduled due date even though an earlier maturing installment or a delinquency charge on an earlier installment has not been paid in full.
L.1968,c.221,s.12; amended 1995,c.348,s.1.
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Last modified: October 11, 2016