All policies of insurance issued in this Commonwealth
insuring personal property through a transaction involving a debtor pledging
personal property as collateral or personal property purchased under a credit
transaction or their equivalent, the premium or cost of which is paid as an
identifiable charge, in whole or in part by the debtor, shall be written for
the full term for which the premium is charged and shall contain full and
complete information on the following:
(1) Perils insured against.
(2) Amount of insurance covering the article
purchased or offered as security or pledged as collateral.
(3) Rate charged for each $100 of
insurance.
(4) Amount of the gross
premium charged for each peril insured against when the premium is divisible
and the aggregate premium charged for all perils insured against when the
premium is not divisible.
(5)
Effective date of insurance to be provided and the term of insurance to be
provided.
(6) The personal property
insurance premium shall be based upon actual cash value of the personal
property purchased in a time sales finance transaction. In a consumer loan
transaction, the personal property insurance premium shall be based upon the
lesser of the amount of the cash proceeds or the actual cash value of the
personal property offered as security or pledged as collateral. The amount of
personal property insurance shall not include any finance charge, service
charge, or similar charge or any fee including but not limited to those
designated as service, notary, prothonotary, recording, or registration fees
and shall not include any life insurance premium, accident and health insurance
premium or personal property insurance premium.
(7) Memorandum or certificate of insurance or
other evidence of insurance must be given each insured debtor within 30 days
after an indebtedness is incurred and should be readily identifiable with the
master policy in question and shall contain all conditions and exclusions of
the master policy including but not limited to information designated in this
section. At the time an indebtedness is incurred, the debtor shall receive a
copy of the Security Agreement, Financing Statement, or similar document
evidencing among other items personal property insurance coverage afforded the
debtor. All changes in policy terms and conditions shall be evidenced by an
endorsement forwarded directly by the insurer to both the debtor and
creditor.
