Printable Format16a-4-301. (UCCC) Property insurance. (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 of or damage to property 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) A creditor may not contract for or receive a separate charge for insurance against loss of or damage to property unless property is purchased pursuant to a credit card or in a transaction pursuant to open end credit, or unless the amount financed exclusive of charges for the insurance is $900 or more, and the value of the property is $900 or more.
History: L. 1973, ch. 85, § 76; L. 1999, ch. 107, § 24; July 1.
KANSAS COMMENT, 2000
1. The restrictions on property insurance imposed by subsection (1) are similar to those provided by retail installment sales acts in a number of states and basically track with the old Kansas sales finance act.
2. Subsection (2) permits reasonable flexibility so that the expiration of the term of property insurance need not coincide exactly with the scheduled maturity of the debt.
3. Subsection (3) prohibits a separate charge for property insurance when either the amount of debt or the value of the property to be insured is relatively small. Open end credit is exempted from this limitation.
Attorney General's Opinions:
Property insurance; damage to property unrelated to credit transaction. 86-42.
Consumer credit insurance; property and liability insurance. 87-3.
Property and liability insurance. 87-47.