Vendor\u2019s Single Interest (VSI) insurance<\/a>, also known as Blanket VSI, is a specialized collateral protection policy that safeguards a lender\u2019s financial interest in collateral when a borrower fails to maintain adequate insurance coverage. The policy is designed to provide automatic coverage over a lender\u2019s consumer loan portfolio, which may include autos, vans, light trucks, motorcycles, RVs, watercraft, mobile homes, and heavy trucks, with the option to add additional collateral types.<\/span><\/p>\n <\/p>\n Instead of tracking insurance policies throughout the life of each loan, lenders can rely on a Vendor’s Single Interest policy to automatically protect their portfolio. Under the policy, lenders are required to verify evidence of insurance at loan closing, but they are not required to track the policy afterward. If a vehicle or other eligible collateral is repossessed, uninsured, and damaged, the lender can file a claim under the policy \u2014 with repossession triggering a claim event.<\/span><\/p>\n The premium of a Vendor’s Single Interest policy can be applied as a one-time, per new loan charge or a monthly charge based on the outstanding balance of the loan portfolio. In many states, the per new loan charge may be passed onto the borrower at time of loan closing.\u00a0<\/span><\/span><\/p>\n While both Vendor’s Single Interest (VSI)<\/a> and Collateral Protection Insurance (CPI)<\/a> help mitigate the risks of uninsured collateral, their processes differ significantly:<\/p>\n Insurance tracking required?<\/span><\/p>\n<\/td>\n Not Required<\/span><\/p>\n<\/td>\n Required<\/span><\/p>\n<\/td>\n<\/tr>\n Force-placement process?<\/span><\/p>\n<\/td>\n Not Required<\/span><\/p>\n<\/td>\n Required<\/span><\/p>\n<\/td>\n<\/tr>\n Borrower notifications?<\/span><\/p>\n<\/td>\n Not Required<\/span><\/p>\n<\/td>\n Required<\/span><\/p>\n<\/td>\n<\/tr>\n Loan servicing complexity<\/span><\/p>\n<\/td>\n Simple<\/span><\/p>\n<\/td>\n Complex<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n While the above-mentioned differences in loan servicing may not appear significant at first glance, the impact on a lender’s operations and its borrowers can be substantial. By eliminating the need to track insurance after loan closing, lenders can effectively and efficiently safeguard their financial interest without the burden of a traditional CPI tracking program.<\/span><\/p>\n In a complex regulatory environment, a Vendor’s Single Interest policy provides a smart, simplified approach to managing risk. It\u2019s an efficient solution that protects a lenders consumer loan portfolio, supports compliance, and frees loan servicing operations from the burden of insurance tracking, sending warning notifications and force-placing coverage.<\/p>\n Click the button below to learn how a VSI policy can streamline your risk management.<\/span><\/p>\nWhat is the cost of Vendor’s Single Interest?<\/h2>\n
What types of coverage does a Vendor’s Single Interest policy provide?<\/h2>\n
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Vendor’s Single Interest (VSI) vs. Collateral Protection Insurance (CPI)<\/h2>\n
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\n Vendor’s Single Interest (VSI)<\/span><\/h4>\n<\/td>\n
\n Collateral Protection Insurance (CPI)<\/span><\/h4>\n<\/td>\n<\/tr>\n
\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n What are the Benefits of a Vendor’s Single Interest policy?<\/h2>\n
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Here’s Our Final Thoughts<\/h2>\n
Ready to explore a Vendor’s Single Interest policy?<\/span><\/h2>\n
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