As a lender, you know there is significant risk involved in the way you do business. You check credit sores to assess the risk of underwriting loans for various would-be borrowers. Imagine being the lienholder for an automobile that is involved in a major accident and the borrowers’ insurance isn’t enough to cover the loss! What protects the assets that you partially own as a lender? How do you protect your uninsured collateral?
Understanding Lenders Single Interest
You need a lenders single interest or blanket vendors single interest policy to protect your assets. This type of insurance protects your interests in lease or loan collateral and usually involves the following items:
- Cars and trucks
- All-terrain vehicles
- Motor homes
- Other equipment provided as collateral
An LSI or VSI policy covers all physical damage and losses, including fire and theft, confiscation, conversions and repossessions. This coverage even protects you in a situation where another entity has a superior lien to yours.
Getting the Right Coverage
The best thing about these types of coverages is that they can cover your entire loan portfolio. When you’re in the business of providing loans, it’s important to have proper insurance from a provider that understands the unique needs of your business. Look for a policy that covers both your existing loans as well as any new loans right away.