Broad protection against collateral loss for the entire loan/lease portfolio, without the need to track insurance status.
Uninsured collateral is not a random occurrence. Though credit unions require borrowers to obtain physical damage insurance, there is no guarantee that they will get the required coverage or keep it in force throughout the entire term of the loan.
Lenders Single Interest protects the credit union’s interest against any loss that occurs if you repossess damaged collateral and the member’s insurance has lapsed.
The program is comprised of four basic coverages:
- All-Risk Physical Damage Installment Loan Coverage protects the credit union from loss due to covered property damage from uninsured collateral. This coverage also affords coverage for theft losses on your uninsured collateral. As with all coverage available under this program, this coverage requires the credit union to repossess the damaged vehicle or attempt to repossess the stolen vehicle.
- Instrument Non-Filing Errors and Omissions Coverage protects the credit union from loss due to inadvertent errors and omissions caused by credit union personnel in recording the lien with the proper officials, thus preventing the institution from retaking possession of the collateral securing their defaulted loan.
- Confiscation and Conversion (Skip) Coverage protects the credit union from loss on uninsured loans caused by the failure to retake possession of secured collateral due to: The confiscation of the secured collateral by a duly authorized law enforcement agency, as long as the secured collateral was not involved in illegal acts; or, the disappearance of the borrower and the secured collateral. The credit union must make a reasonable effort, using all available resources, to locate the borrower or the secured collateral. Upon Notice of Loss, the insurance company will also attempt to locate the borrower or the secured collateral to satisfy the requirements of the policy.
- Repossessed Property Coverage protects the credit union from uninsured property damage from uninsured collateral for 60 days after the date of repossession. This coverage should provide adequate time for the sale of the collateral.
Benefits to the Credit Union:
- Complete coverage of loan portfolio – no insurance tracking required
- Broad coverage of loan collateral losses
- Easy to use – no administrative burden: simple monthly loan and premium report
- No member complaints and no force-placed premiums to write off
At the time of the loan, the credit union adds the Lenders Single Interest (LSI) premium to the member’s loan contract. This coverage has been extremely popular due to its high degree of administrative simplicity and its cost-effectiveness to the credit union.
Contact CU Insurance Solutions today for more information at 207-773-0925 or complete the form below.