What is Lender Placed Insurance?
Despite its importance, many drivers in the United States do not have auto insurance. When a borrower leaves a dealership, they might have car insurance at that moment, but due to difficulties in payment, they could end up allowing it to lapse leaving the lender’s collateral unprotected. Auto insurance prices have skyrocketed making it more difficult for drivers to maintain the proper coverage. When this happens, the lender’s business is suddenly at risk. This is where lender-placed insurance becomes highly valuable.
Understanding Lender-Placed Insurance
Lender-placed insurance is placed on an auto loan by the lienholder. This form of insurance is also commonly called collateral protection insurance (CPI). This type of insurance allows the vehicle to remain insured if the borrower stops their insurance or the coverage is not enough.
The great advantage of lender-placed insurance is that it protects the lender’s vehicle and covers the repair costs if the borrower is in an accident if they do not have the proper auto insurance coverage. Lender-placed insurance also protects if the accident results in a total loss of the vehicle.
How Verifacto Works
The last thing any lender wants to deal with is having an uninsured borrower get into an accident with their vehicle. The more borrowers a lender has, the more difficult it is to keep track of their insurance status.
This is where Verifacto comes in. Our software is designed to help lenders enforce lender-placed insurance on all uninsured vehicles with our innovative CPI management system and insurance tracking platform. Borrowers also receive the extra benefit of having access to an insurance marketplace to purchase their liability insurance and compare prices to get the best deal. Benefits of using lender-placed insurance with Verifacto include:
- Built-in compliance tracking
- Easy-to-use CPI management system
- 24/7 insurance search
- User-friendly website that integrates with your DMS
- Reliable technical support
Verifacto’s state-of-the-art technology enables dealers and finance companies to gain control and easily manage a CPI program with minimal overhead and increased compliance making the program the most efficient in the market and the best way for you to provide lender-placed insurance.
Making sure your borrowers have coverage is now easier to do than ever before. With the added benefit of giving them an easy to access insurance marketplace, borrowers can purchase the liability insurance they need before leaving your office.
The VeriSurance Marketplace allows borrowers to shop and compare quotes from over 50 highly rated companies. VeriSurance Marketplace works by comparing auto insurance quotes from the most trusted companies and automatically matches this information with your borrowers so they receive the best car insurance offers.
Try a Free Demo Today
At Verifacto, we provide better risk management for your dealership or financial lending institution. By using insurance tracking and our online insurance marketplace, your business will see an increase in profits and a reduction in losses. We want to help your business perform at its best and keep your collateral fully protected.
Contact us today to try a free demo and see how we can help you with your lender-placed insurance and tracking needs.
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