Florida

The relevant statutes are Florida Consumer Finance Statute, Fla. Stat. Ann. §§516.001 et seq. (“FL-SLA”) and the associated Florida Consumer Finance Administrative Regulations, Fla. Admin. Code §§3D-160.001 et seq. (“FL-SLAR”) for FL-SLA licensees. All lenders are subject to Fla. Stat. Ann. §§ 626.9551 and 655.946.

A. Actions lender may take:

(1) FL-SLAR §3D-160.025(12) - If a loan agreement requires that a borrower keep real property insured, FL-SLA licensees may require that borrowers furnish and maintain a physical damage insurance policy naming the licensee as the loss payee. If the borrower does not furnish a physical damage insurance policy upon the FL-SLA licensee's request, the licensee may obtain either a single interest or dual-interest replacement policy and charge premiums to the borrower's loan account.

(2) For other lenders, no express statutory provision.

B. Notices required: Fl. Stat. Ann. §655.946 - If a financial institution (i.e., a state or federally chartered bank) purchases or causes to be issued insurance coverage to protect its security interest in a loan, and the borrower is responsible for paying the premium under an agreement with the lender, the financial institution must send a written notice by first-class mail to the borrower within 30 days after such purchase or issuance notifying the borrower that:

(1) The financial institution has purchased or caused to be issued an insurance policy that covers only its property interest which is the security for the loan;

(2) The borrower may avoid any additional premium charges by purchasing an acceptable dual-interest insurance policy within 30 days after this notice, which will terminate the single interest policy as of the effective date of the dual-interest policy, and that any unearned premium will be returned, plus interest.

(3) All other lenders, no express statutory provision.

C. Coverage required:

(1) Fl. Stat. Ann. §655.946 - A financial institution may require insurance coverage to protect its security interest in a loan.

(2) FL-SLAR §3D-160.025(12) - FL-SLA licensees may obtain either a single interest or dual-interest replacement policy if the borrower fails to furnish a physical damage insurance policy upon the licensee's request.

D. Charges permitted:

(1) FL-SLAR §3D-160.025(12) - For FL-SLA licensees, premiums for a single interest or dual-interest replacement insurance policy may be added to the borrower's loan account.

(2) Fl. Stat. Ann. §626.9551(1)(c) - No person may require that any borrower or insurer pay a separate charge in connection with the handling of any insurance policy required in connection with a loan on real estate or pay a separate charge to substitute the insurance policy of one insurer for another, unless such charge would be required if the person were providing the insurance. This prohibition does not include the interest that may be charged on premium advances made in accordance with the security instrument.

E. Finance charge allowed on lender's payment: Fl. Stat. Ann. §626.9551(1)(c) - All lenders may charge interest on premium advances made in accordance with the security instrument.

Click here to view relevant Florida Code and Regulations.