Wisconsin Statutes 424.301 – Restrictions on property insurance
Current as of: 2023 | Check for updates
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Terms Used In Wisconsin Statutes 424.301
- Appraisal: A determination of property value.
- Contract: A legal written agreement that becomes binding when signed.
- Following: when used by way of reference to any statute section, means the section next following that in which the reference is made. See Wisconsin Statutes 990.01
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
- Property: includes real and personal property. See Wisconsin Statutes 990.01
(1) A creditor may not contract for a separate charge or receive a separate charge for insurance against loss of or damage to property in which the creditor holds a security interest or to property leased under a motor vehicle consumer lease unless all of the following conditions are met:
(a) The insurance covers a substantial risk of loss or damage to property which is allowable collateral under s. 422.417 for the credit transaction.
(b) The amount of the insurance does not exceed any of the following:
1. The actual cash value or stated value of any motor vehicle, manufactured home, or mobile home in which the creditor holds a security interest.
2. The cash value or replacement value of any property in which the creditor holds a purchase money security interest.
3. The stated amount of the customer’s credit line if the purchase money security interest secures transactions pursuant to an open-end credit plan.
5. In any other transaction, the total payments or, if the transaction is for a term of 49 months or more, the amount financed.
(c) The term of the insurance is reasonable in relation to the terms of credit.
(1m) The limitations of subs. (1) and (2) and s. 422.202 (1) (b) do not apply to property insurance on some or all of the property in which the creditor holds a security interest if the creditor does not require any insurance on the property and if the creditor is not designated a loss payee in the policy. Subsection (3) does not apply to a credit transaction solely to finance the purchase of such property insurance.
(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 the amount financed exclusive of charges for the insurance is $800 or more, and the value of the property is $800 or more.
(4)
(a) A creditor may not contract for or receive a separate charge for insurance against loss of or damage to the customer’s property in which the creditor does not hold a security interest if any of the following apply:
1. The creditor sells the customer insurance described in sub. (1) covering some or all of the same property, except as provided in sub. (1m).
2. The amount of the insurance exceeds the amount by which the value of the property exceeds the amount of insurance against loss or damage to the property which the customer has in force at the time the consumer credit transaction is consummated.
(b) If the customer purchases property insurance in addition to that already in force, the value of the customer’s property shall be verified by the customer’s written statement or an appraisal or a bill of sale.
(5) A violation of this section is subject to s. 425.303.
(6) This section does not apply to portable electronics insurance, as defined in s. 632.975 (1) (e).