Florida Insurance Premium Financing Calculator

How this calculator works

Insurance premium financing is a third-party loan that pays an insurance carrier the full annual premium up front and lets the borrower repay the loan in monthly installments. The lender is a licensed premium finance company (PFC) regulated under the Florida Insurance Premium Finance Act, F.S. § 627.838-627.851. The borrower signs a premium finance agreement, makes a down payment (typically 20-25% of the annual premium), and then makes monthly installment payments over a term shorter than the policy period. The lender holds a power-of-attorney to cancel the policy and collect the unearned premium directly from the carrier if the borrower defaults under F.S. § 627.848.

The Florida-specific framing matters. Coastal homeowners insurance under F.S. § 627.4133 now commonly runs $8,000-$20,000 per year on a single-family residence after the 2022-2025 carrier-retreat dynamic. For a homeowner who cannot write a five-figure check at policy renewal, the practical choices are: (1) pay annually out of savings; (2) finance through a Florida-licensed PFC; or (3) charge to a credit card and carry the balance. Each has a different cost. This calculator computes all three so you can compare them side-by-side.

The math:

1. Down payment = annual premium × down-payment percentage. Florida-typical is 20-25%.
2. Financed balance = annual premium minus down payment.
3. Finance charge (interest) = financed balance × APR × term in months / 12. Florida PFC service charges under F.S. § 627.840 are typically quoted on a simple-interest basis applied to the average unpaid balance — the straight-line approximation we use here matches the disclosure most PFCs print on the premium finance agreement.
4. Service charges = flat monthly service charge × term months. F.S. § 627.840 allows a per-installment service fee on top of the APR-based finance charge; $10-$25/month is Florida-typical.
5. Total cost of financing = finance charge + service charges.
6. Monthly payment = (financed balance + total cost of financing) / term months.
7. Effective APR = annualizes the all-in cost (interest + service charges) against the financed balance and the actual term. Captures the punch of the flat service charge on a short term.
8. Total annual outlay = down payment + (monthly payment × term months) — the actual cash leaving the borrower's checking account over the policy year.
9. Cost vs. paying annually = total annual outlay minus annual premium.
10. Cost vs. credit-card-pay-annually = the same total premium charged to a credit card at the supplied APR and paid off over 12 months in equal installments, compared against the PFC total cost of financing.

The Florida premium finance regulatory framework

The Florida Insurance Premium Finance Act sits in chapter 627 of the Florida Statutes and applies to any company that advances funds to pay an insurance premium on behalf of a Florida resident. The pieces that show up directly in this calculator's math:

• F.S. § 627.838 — Defines premium finance company, premium finance agreement, and scope. Establishes the regulatory framework administered by the Office of Insurance Regulation (OIR) and the Department of Financial Services (DFS).

• F.S. § 627.840 (maximum service charge) — Caps the service charge a Florida-licensed PFC can charge. The cap is expressed as a maximum dollar charge per $100 of the average unpaid balance, which translates to an effective-APR ceiling of roughly 18%-25% depending on term. The statute also permits a flat per-installment service fee ($10-$25/month is Florida-typical). An effective APR materially above 25% on a Florida residential property insurance premium is a flag to verify the lender is actually Florida-licensed and subject to the cap.

• F.S. § 627.842 (form of premium finance agreement) — Requires the agreement to disclose the lender's license number, the amount financed, the finance charge, the APR, the schedule of payments, and the F.S. § 627.848 cancellation-on-default and F.S. § 627.851 prepayment-refund frameworks. An agreement that omits any of these is a flag.

• F.S. § 627.848 (cancellation on default) — Governs what happens on a missed payment. The PFC sends a 10-day notice of intent to cancel; if the borrower does not cure, the PFC sends the carrier a cancellation request; the carrier cancels the policy effective the date in the request and pays the pro-rata or short-rate unearned premium to the PFC; the unearned premium is applied against the outstanding loan balance, and any deficiency is owed by the borrower. The borrower loses coverage from the cancellation date forward. Meaningful in Florida — a coverage gap during hurricane season can be catastrophic, and re-binding coverage after a lapse is materially harder than renewing existing coverage.

• F.S. § 627.851 (refund of unearned charges on prepayment) — Requires the PFC to refund unearned finance charges on early payoff. The refund formula is statutory: the PFC computes the portion of the original finance charge attributable to the unexpired term and refunds it, less a permitted retention to cover the lender's setup cost. The flat monthly service charge is also pro-rated.

A worked example: $10,000 coastal HOI premium

A Florida coastal homeowner has a $10,000 annual property insurance premium under F.S. § 627.4133. They cannot pay annually out of savings. They finance through a Florida-licensed PFC at 25% down, 9-month term, 18% APR, with a $12/month flat service charge under F.S. § 627.840.

The math:

• Down payment: $10,000 × 25% = $2,500
• Financed balance: $10,000 - $2,500 = $7,500
• Finance charge (interest): $7,500 × 18% × 9/12 = $1,012.50
• Total service charges: $12 × 9 = $108
• Total cost of financing: $1,012.50 + $108 = $1,120.50
• Monthly payment: ($7,500 + $1,120.50) / 9 = $957.83
• Effective APR (all-in including service charge): roughly 19.9%
• Total cash outlay over the policy year: $2,500 + ($957.83 × 9) = $11,120.50
• Cost vs. paying $10,000 annually up front: $1,120.50 more

Versus the credit-card route: charge the full $10,000 to a 22% APR credit card and pay it off over 12 months in equal installments. The 12-month amortized payoff total interest is approximately $1,232. So the PFC route at 18% APR / 9 months costs $1,120.50; the credit-card route at 22% APR / 12 months costs $1,232. Premium financing wins by about $111.

The credit-card route can flip in a couple of common scenarios: (1) a 0% balance-transfer offer of 12-18 months on a new card, which puts the credit-card finance charge at zero and beats every PFC structure; (2) a rewards card the borrower pays in full each month from cash flow, which makes the credit-card route effectively a cash-flow loan from the card's grace period at no interest cost. Both are situational; for most Florida coastal homeowners the PFC route is the cheaper of the financing options.

What the APR cap actually means

F.S. § 627.840 sets a statutory cap on the service charge a Florida-licensed PFC can collect, and the cap is the regulatory hook that distinguishes Florida-licensed lenders from unlicensed offshore actors. The cap is expressed as a maximum dollar charge per $100 of the average unpaid balance — the statute does not name a single APR ceiling, because the effective APR depends on term length (a 6-month loan and a 12-month loan with the same per-$100 service charge have different APRs). The practical translation: a Florida-licensed PFC on a 9-12 month residential premium finance loan typically lands at an effective APR of 12-22%, with 25% as the practical Florida-licensed ceiling. This calculator flags an APR above 25% so you can verify the lender is actually Florida-licensed before signing.

The DFS premium finance company directory (linked in the references) is the authoritative source. Search by company name; an active license should appear. If the company is not listed, or the listed company does not match the lender on your premium finance agreement, walk away — out-of-state and offshore lenders may not be bound by the F.S. § 627.840 cap, and Florida residents financing a Florida-domiciled policy should only sign with a Florida-licensed PFC.

The default-and-cancellation risk

The single most important piece of the premium finance arrangement from the borrower's perspective is the cancellation-on-default mechanism under F.S. § 627.848. The PFC holds a power-of-attorney from the borrower (signed as part of the original premium finance agreement) authorizing the lender to cancel the underlying insurance policy and collect the unearned premium directly from the carrier on default. The sequence:

1. The borrower misses a monthly payment.
2. The PFC sends a 10-day notice of intent to cancel.
3. If the borrower does not cure (pay the past-due plus any allowed late fee), the PFC sends the carrier a cancellation request invoking the power-of-attorney.
4. The carrier cancels the policy effective the date specified in the request (typically 5-10 days after the request is sent).
5. The carrier computes the pro-rata or short-rate unearned premium and pays it to the PFC, not the borrower.
6. The PFC applies the unearned premium against the outstanding loan balance.
7. Any deficiency (loan balance minus unearned premium) is owed by the borrower; any surplus is refunded.

The practical effect for a Florida coastal homeowner: a missed payment in August can leave you uninsured for hurricane season. Re-binding coverage after a lapse is materially harder than renewing existing coverage — Florida carriers commonly impose a moratorium on writing new business during named-storm watches, the Citizens Property Insurance Corporation has its own application and underwriting process, and the lapse will show on future insurance applications. The premium-finance default risk is therefore not just a financial cost; it is a coverage-continuity risk that can cascade into a structural exposure during the storm season.

The Florida coastal context

Premium financing in Florida is not a luxury product or a credit-impaired-borrower product. It is the dominant payment method for Florida residential coastal property insurance because of the structural cash-flow mismatch between policy pricing and household cash position. Specifically:

• Premiums have roughly tripled since 2018. Florida coastal HOI under F.S. § 627.4133 averaged $2,500-$4,000/year in 2018; it averages $8,000-$15,000/year on coastal single-family residences in 2026, with high-value coastal properties commonly above $20,000.

• The Citizens Property Insurance Corporation moved from carrier of last resort to dominant carrier in some coastal ZIPs. Citizens depopulation requires policyholders to accept a Citizens-comparable private offer or face surcharges (F.S. § 627.351(6)) — but for many ZIPs, no comparable private offer exists, leaving Citizens as the carrier.

• Annual-pay discounts are rarely meaningful. Florida carriers typically offer a 1-3% discount for annual payment versus financed — not enough to make annual payment compelling if it requires drawing down savings or borrowing at higher cost elsewhere.

The result is a Florida residential premium-finance market that is structurally larger than in any other state. There are dozens of Florida-licensed PFCs serving the residential market; the DFS directory lists them, and the F.S. § 627.840 cap keeps the effective APRs competitive. For a borrower, the practical decision is not "should I finance?" — it is "which Florida-licensed PFC has the lowest effective APR for my policy?" plus "is the credit-card route on a 0% balance transfer cheaper for me right now?" This calculator answers the second question; the first is best answered by your 2-20 agent or directly through quotes from the listed PFCs.

What this calculator does NOT do

This is a Florida-statutory-anchored premium financing cost estimator. It does not:

• Substitute for the premium finance agreement itself. F.S. § 627.842 requires the agreement to disclose specific terms, and the binding numbers come from the actual agreement, not this calculator. Pull the agreement before signing.
• Verify the lender is Florida-licensed. The DFS premium finance company directory is the authoritative source; this calculator only flags APRs above the practical ceiling as a reminder to verify.
• Model commercial premium financing in detail. The math works the same way for commercial premium financing under F.S. § 627.838-627.851, but commercial PFCs often offer different down payment and term structures than residential. The defaults here are residential-coastal.
• Compute the F.S. § 627.851 prepayment refund on early payoff. The refund formula is statutory but term-and-payment-history specific; for a binding prepayment quote, request the figure from the PFC.
• Substitute for a Florida-licensed 2-20 insurance agent or financial planner. For the actual financing decision and lender selection, consult a licensed Florida professional before signing.

How this page is maintained

The Florida statutory framework surfaced here — F.S. § 627.838-627.851 — has been stable across recent Florida legislative sessions. The F.S. § 627.840 service-charge cap was last materially adjusted in 2018; the F.S. § 627.848 cancellation framework and F.S. § 627.851 prepayment-refund framework have been stable since the original 1969 enactment of the Florida Insurance Premium Finance Act. The Florida-typical 2026 defaults baked into this calculator (25% down, 9-month term, 18% APR, $12/month service charge, 22% credit-card APR) reflect current Florida-licensed-PFC residential pricing and Federal Reserve G.19 Florida consumer-card APR data; we refresh these each time the relevant agency publishes new data and after each Florida legislative session in case of legislative change.

Last reviewed: 2026-05-15 against F.S. § 627.838-627.851 (Florida Insurance Premium Finance Act), with the F.S. § 627.840 service-charge cap and the DFS premium finance company directory as the primary reference sources.