PROPERTY INSURANCE

(a) A holder may request or require a retail buyer to insure the property purchased or improved under a retail installment transaction, including the purchase of title insurance on real property that is involved in the retail installment contract or retail charge agreement and that is subject to a security interest of the holder, including a lien. (b) If the property is a boat that may be enrolled or licensed as a yacht with the United States Coast Guard and subject to the maritime laws of the United States, a holder may also require a retail buyer to provide in connection with the boat: (1) protection and indemnity insurance; (2) longshoremen's and harbor worker's compensation insurance; and (3) medical payments insurance. (c) The insurance and the premiums or charges for the insurance must bear a reasonable relationship to: (1) the amount, term, and conditions of the retail installment contract or retail charge agreement; (2) the existing hazards or risk of loss, damage, or destruction; or (3) the potential liability. (d) The insurance may not: (1) cover unusual or exceptional risks; or (2) provide coverage not ordinarily included in policies issued to the public. (e) The holder may include the cost of insurance provided under this section as a separate charge in the contract or agreement.