When was the last time you considered the cost and administrative burden associated with the management of your insurance maintenance programs?
When was the last time you reviewed the total expenses associated with tracking and force placing the required borrower insurance?
Did you know that force placed insurance programs can drive up delinquency and charge-offs by as much as 20%?
Lenders Single Interest Insurance, commonly known as Blanket VSI or LSI, protects a lender’s interest in the collateral, securing a loan when the borrower’s loan agreement-required insurance on the collateral lapses or is cancelled.
Coverage is provided on a blanket basis to loans originated on and after the policy effective date, and can be extended to already-existing loans.
Administration is simple. At the time the loan is closed, the lender must make a normal and reasonable effort to confirm that the collateral is covered by borrower-purchased insurance. There is no requirement to track borrower insurance following loan closing to assure that coverage on the collateral remains in force.
Loans which are secured by automobiles, motorcycles, watercraft, recreational vehicles, and other chattel-type property may be covered.
Basic protection under the LSI Policy includes:
“All Risk” Physical Damage prior to repossession – Covers loss to collateral caused by any external source except as specifically excluded. Exclusions consist of, but are not limited to, wear and tear, mechanical breakdown, nuclear reaction or radioactive contamination, and those other causes not normally covered by typical physical damage insurance policies.
Security Interest Filing Errors and Omissions – Covers loss sustained because the lender inadvertently, unintentionally or through error or omission, did not record or file the loan instrument documenting their security interest in the collateral with the proper Public Officer or Public Office; or the proper Public Officer or Public Office did not document the lender’s lien if the instrument documenting their security interest is a Certificate of Title.
Skip – Covers direct loss sustained because the lender cannot locate the borrower or the collateral.
Confiscation – Indemnifies the lender against direct loss sustained by reason of the confiscation or seizure of the collateral by federal, state or local law enforcement officers or any public official.
“All Risk” Physical Damage following repossession – Extends “All Risk” Physical Damage to cover collateral for an additional period after the date of repossession, while the collateral is in the care, custody or control of the lender or its representative, and is being held for sale; or pending delivery after sale by the lender or its representative.
Modifications and enhancements are available, including Mechanic’s Lien, Repossession Expense and others, which enable coverage to be tailored to suit each lender’s individual needs by underwriters with 35+ years’ experience in the consumer lending business.
This coverage will protect you and your customer. GAP pays the difference between the insurance settlement and the balance of the loan which eliminates a potential deficiency balance or account charge-off.
Available for loans up to 150% of MSRP or NADA Retail, it pays the primary insurance deductible up to $1,000, and is available for loans written up to 84 months.
- Recreational Vehicles
- Snow Mobiles
- and more
Auto Service Contracts
Service contract plans and administrative services for automobiles, light trucks, powersports, watercraft, recreational vehicles and mobility vans through:
- Franchised Automobile Dealers
- Independent Automobile Dealers
- Leasing Companies
- Financial Institutions/Credit Unions
- Dealer/Agent Insurance Company Captives