The insurance I have for the rooming house is about triple the rates for my regular rentals and I have a commercial umbrella tied into it was well. Between the two of them, it's about $ 6000 and I normally use premium financing. Last year I wasn't happy with the interest rate but went with it. This year, they raised the rate to a bit over 16%. I just happened to have one of those zero percent offers from my credit card company and decided to cut them out and use the credit card. The zero percent offer is until next June and I'll be done with it prior to then. This evens out my cash flow better as well as rather than giving them $ 1500 up front and then financing the balance, it's zero down and I'll auto pay the card $ 500 a month for the next 12 months. The premium finance company's payments were going to be $ 440.00 per month and that was after laying out the 1500 downpayment. It was a no brainer to use the credit card offer.

In any event, there's discussion here occasionally about loaning money and it occurs to me that premium financing is a very safe sort of loan/investment activity. Generally, they'll cancel your premium if you don't abide by the premium finance agreement so that means the borrower is going to pay. The lender/investor is making 16% almost risk free. If there's a default, I'm figuring they'll can get a refund of premiums in excess of those earned thereby minimizing the loss. The yield they're getting on the money would cover any loss left.