424.301 Restrictions on property insurance.

381 words·~2 min read·/wi/chapter-424/424-301-2

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)A creditor may not contract for a separate charge or receive a separate charge for insurance against loss of or damage to property in which the creditor holds a security interest or to property leased under a motor vehicle consumer lease unless all of the following conditions are met:

(a)The insurance covers a substantial risk of loss or damage to property which is allowable collateral under s. 422.417 for the credit transaction.

(b)The amount of the insurance does not exceed any of the following:

1. The actual cash value or stated value of any motor vehicle, manufactured home, or mobile home in which the creditor holds a security interest.

2. The cash value or replacement value of any property in which the creditor holds a purchase money security interest.

3. The stated amount of the customer’s credit line if the purchase money security interest secures transactions pursuant to an open-end credit plan.

5. In any other transaction, the total payments or, if the transaction is for a term of 49 months or more, the amount financed.

(c)The term of the insurance is reasonable in relation to the terms of credit.

(1m)The limitations of subs.

(1)and

(2)and s. 422.202

(b)do not apply to property insurance on some or all of the property in which the creditor holds a security interest if the creditor does not require any insurance on the property and if the creditor is not designated a loss payee in the policy. Subsection

(3)does not apply to a credit transaction solely to finance the purchase of such property insurance.

(2)The term of the insurance is reasonable if it is customary and does not extend substantially beyond a scheduled maturity.

(3)A creditor may not contract for or receive a separate charge for insurance against loss of or damage to property unless the amount financed exclusive of charges for the insurance is $800 or more, and the value of the property is $800 or more.

(a)A creditor may not contract for or receive a separate charge for insurance against loss of or damage to the customer’s property in which the creditor does not hold a security interest if any of the following apply: