Section 427.125 - Notice of placement of insurance - grace period1. Within thirty calendar days following the placement of collateral protection coverage, the creditor shall mail to the debtor at the last known address of any such person, a notice entitled "Notice of Placement of Insurance" in a form substantially similar to the following: "NOTICE OF PLACEMENT OF INSURANCE
Your credit agreement with us requires you to maintain adequate insurance on your collateral until you pay off your credit agreement. You have not given us proof that you have adequate insurance on your collateral. Under the terms of your credit agreement, we have purchased insurance at your expense to protect our interests in your collateral.
The insurance we purchased will pay claims made by us as the creditor. The insurance we purchased may not pay any claims made by you or against you in connection with your collateral.
You are responsible for the costs of this insurance, including the insurance premium, interest and any other charges we may impose in connection with the purchase of this insurance. The costs of this insurance may be more than insurance you can buy on your own.
You still may obtain insurance of your own choosing on the collateral. If you provide us with proof that you have obtained adequate insurance on your collateral, we will cancel the insurance that we purchased and refund or credit any unearned premiums to you. If, within thirty days after the date this notice was sent to you, you provide us with proof that you had adequate insurance on your collateral as of the date we purchased or placed insurance on this debt and that you continue to have the insurance that you purchased yourself, we will cancel the insurance that we purchased without charging you any costs, interest, or other charges in connection with the insurance that we purchased."
2. Provided the creditor otherwise complies with subsection 1 of this section, a creditor may extend a grace period for sixty days or more from the date the debtor defaults on providing proof of insurance in which case collateral protection insurance placed at the expiration of the grace period may include a premium charge for such coverage retroactive to the date the debtor defaulted on the obligation to provide proof of insurance. If such a premium charge is included, the creditor shall amend the notice required by subsection 1 of this section to reflect that the creditor will cancel the insurance with no cost to the debtor only if the debtor provides proof of insurance that was effective as of the first day of the grace period.3. The terms for repayment of the costs of the collateral protection coverage, which shall include interest and any other charges imposed by the creditor in connection with the placement of the collateral protection coverage, shall include one or more of the following:(1) Full payment within thirty days after the date of the notice of placement of insurance;(2) A final balloon payment within thirty days after the last scheduled payment required by the credit agreement; or(3) Full amortization over the term of the credit transaction, the term of the collateral protection insurance policy, or the term for which amortization is used by the creditor.L. 1997 H.B. 257, A.L. 1998 S.B. 792