(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 or damage to property, all or part of which is 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) Any charge for insurance against loss of or damage to property may be subject to a minimum charge of two dollars.
HISTORY: 1962 Code Section 8-800.321; 1974 (58) 2879; 1985 Act No. 127; 1986 Act No. 401.