Vendor’s Single Interest (VSI)
VSI is essentially a blanket policy covering the bank against damage to repossessed collateral. The lender typically pays for the coverage out of the loan origination fees. Pricing is available on a per vehicle basis, premium due at the time of loan origination or a premium based on the monthly balance of the portfolio.
Using VSI alone to insure a portfolio has its weaknesses. The rate increases each time a claim is made and can become too expensive or unavailable very quickly. If the insurance is canceled it leaves the lender very little time to put in place a tracking program if another VSI carrier is not willing to write a policy. VSI insurance is best used in conjunction with CPI insurance.
Coverages
- Collision & Comprehensive
- Damage on Repossessed Vehicles
- Errors & Omissions for Physical Damage
- Premium Coverage
- Repossession expenses
- Instrument Non-filing
- Physical damage to repossessed property
- Conversion & confiscation (Skip)
Covered Collateral
- Autos
- Light Trucks
- Wheeled Equipment
- Watercraft
- Recreational Vehicles
- Motor Homes
- Commercial Vehicles
