Higher Down Payments for Commercial Auto Policies with Filings
Many companies that offer commercial auto insurance will offer a variety of payment plans for the policy
. Eligibility of these plans will vary from policy to policy and often depends on whether or not the policy has fillings that are associated with it.In California, many insurance companies will issue an MCP filling for the insured. This tells the state that the vehicle is insured up to the limits that are required on for the filing. Coverage cannot be below $750,000 for vehicles that have an MCP filing. When the insurance company notifies the DMV that the filing is on the policy they at the same time agree to notify the DMV 35 days in advance of any midterm cancelation.
This in turn means that the insurance company will not be able to cancel the policy for at least 35 days after the due date of the bill. Many insurance companies now collect a higher percentage of the premium associated with the policy. This helps to protect the insurance company from a large amount of bad debt associated with policies that cancel for non-payment that have filings.
Having the requirement of a 35 day notice of cancelation sent to the DMV forces these insurance companies to collect a significantly higher down payment for policies with filings. A policy without a filing could be as low as 8.5 percent for the initial installment. Often times, policies that have filings will have down payments that range from 16.5 to 25 percent of the annual premium. This would result in a significantly higher down payment.
Higher Down Payments for Commercial Auto Policies with Filings
By: Paul Woodward