As an auto finance company or BHPH car dealer, one of your main concerns is risk management in the auto insurance industry. The responsibility of the borrower is not always guaranteed, but with Collateral Protection Insurance, or CPI, we can help mitigate that risk and help borrowers feel more responsible for the amount they are borrowing from a lender. If you’re a lender, you may have had trouble ensuring borrowers, or helping them purchase adequate auto insurance to fulfill their loan agreement insurance requirements. Verifacto™ insurance tracking software can help your business provide adequate control, risk mitigation, and lending management all in one easy-to-use, comprehensive program. Let’s look deeper into CPI and how Verifacto™ works.
What is Verifacto™?
Verifacto™ is the leading provider of cloud-based software that enables auto finance companies and BHPH car dealers to track customers’ auto insurance status, allowing instant and thorough management mitigation, and reduction of driver insurance risk through consistent electronic communication with drivers. Verifacto™ essentially increases properly insured drivers on the road, protecting your portfolio and finances by enabling the lenders to place CPI when it’s needed and comply with CPI regulations. Verifacto’s™ insurance tracking solution is a very effective, easy to manage, and prevents human errors.
What Is Collateral Protection Insurance?
Collateral protection insurance works well in an auto loan situation, but how does it work, exactly? A borrower signs the loan agreement and an insurance addendum. The addendum provides the initial CPI disclosures regarding the debtor’s obligation to maintain insurance during the term of the loan and also requires the debtor to acknowledge the following:
- The debtor does have and will be providing evidence of physical damage insurance before taking possession of the collateral
- The debtor will not be providing evidence of insurance and understands that CPI will be added in seven days at a disclosed cost to the debtor if he does not provide evidence of insurance.
With collateral protection insurance, only uninsured borrowers of lender-owned collaterals are affected. In addition, CPI insurance policies can protect borrowers as well by repairing a damaged vehicle. CPI is a win-win for lenders and borrowers, reducing the instability caused by uninsured drivers. Borrowers may, however, have to pay the premium charge for CPI.
How Does Verifacto Help Lenders and Drivers Get Collateral Protection Insurance?
Verifacto’s™ innovative CPI solution module is designed with advanced compliance and tracking technology that lets you, as a lender, see and control your own portfolio insurance risk. What could be better than that? Since auto insurance costs have been increasing lately, lenders may be experiencing increased policy cancellations and more uninsured drivers. CPI can help with that — it’s the most effective way to keep drivers insured in today’s market.
Verifacto™ auto insurance tracking will:
- Decrease uninsured portfolio losses
- Decrease losses occurring while the vehicle is driven by an excluded driver, or by a driver other than the insured driver on a Named Driver policy
- Decrease loss caused by excluded perils
- Enable the lender to use their reinsurance company to participate up to 100% in the underwriting results of the CPI insurance program
- Increase compliance
- Increase automation and efficiency
- Speed up the sales process
Verifacto’s™ CPI insurance solution is the most efficient and profitable way to mitigate loss due to uninsured drivers on the roads.
If you’re looking for a solution to help auto buyers locate insurance before they even leave your location, VeriSurance™ enables drivers to purchase both liability only auto insurance or full coverage auto insurance instantly following a purchase. They can compare quotes and select an auto insurance policy that’s perfect for them. Verifacto™ auto insurance tracking is an excellent solution for auto dealers and auto loan lenders to manage risk. Avoid these financial losses altogether and contact Verifacto today to receive a demo free of charge. Verifacto™ — We Got Your Back.