(1) A creditor may not contract for or receive a separate charge for insurance against loss of or damage to property unless:
- (a) the insurance covers a substantial risk of loss or damage to property, all or part of which is related to the credit transaction;
- (b) the amount, terms, and conditions of the insurance are reasonable in relation to the character and value of the property insured or to be insured; and
- (c) the term of the insurance is reasonable in relation to the terms of credit.
- (2) The term of the insurance is reasonable if it is customary and does not extend substantially beyond a scheduled maturity.
- (3) Any charge for insurance against loss of or damage to property may be subject to a minimum charge of two dollars.
HISTORY: 1962 Code Section 8-800.321; 1974 (58) 2879; 1985 Act No. 127; 1986 Act No. 401.