Vendor’s Single Interest Insurance

Vendor Single Interest Insurance (VSI Insurance) offers financial institutions a valuable tool for managing collateral risk in their vehicle portfolios. Our experts specialize in providing tailored VSI Insurance solutions to over 1,500+banks, credit unions, mortgage servicers, finance companies, and specialty lenders.

One of the key advantages of VSI Insurance is its ability to provide rate stability to lenders regardless of economic fluctuations. For instance, HUB Financial Services has helped numerous clients maintain consistently low VSI rates, with some enjoying the same favorable rates since as early as 2003. Additionally, these clients have experienced significant reductions in annual net charge-offs, ranging from 10% to 18%.

Blanket VSI Insurance, a popular option offered by HUB Financial Services, involves charging borrowers a small premium at the time of loan origination. This premium, which can often be excluded from the APR in most states, is then utilized to cover collateral and skip losses that may occur post-repossession.

What Does Vendor’s Single Interest Cover?

  • Physical damage: This includes damage caused by events like fire, vandalism, theft, weather events, and accidents.
  • Repossession costs: VSI can cover the costs associated with repossessing the collateral if the borrower defaults on the loan.
  • Non-filing errors: It may cover losses resulting from the lender’s unintentional failure to properly file liens or other legal documents related to the collateral.
  • Skip tracing: Some policies offer assistance in locating missing collateral in case of theft or abandonment.

Benefits of VSI Insurance for Lenders:

  • Reduce charge-off expenses by 10% to 18%
  • Enhance portfolio profitability by adding 5 or more basis points
  • Eliminate the need for insurance tracking
  • Shift premium payment responsibility to the borrower at loan origination
  • Cover repossession damages and skip claims using the premium funds
  • Rate stability throughout economic cycles

The optimal VSI Insurance policy for a lender’s portfolio depends on various factors, including portfolio size and individual risk transfer goals. The seasoned experts at HUB Financial Services leverage their extensive experience in banking and insurance to tailor solutions that maximize collateral risk transfer while meeting the unique needs of each client.

If you’re interested in exploring the best VSI Insurance policy for your portfolio, fill out the form below to get connected.