Creditor Placed Insurance, also known as Immediate Issue Insurance is a vital program for financial institutions looking to mitigate the inherent risk of auto lending.  The Creditor Placed Insurance program allows financial institutions to act fast and protect their loan collateral with same-day (immediate issue) insurance coverage.  


Creditor Placed Insurance | Process

Upon approval from the insurance carrier, a master policy will be issued to your financial institution specifying all available coverages.  There is no charge for establishing the master policy.

When loan collateral becomes uninsured, your institution will complete and submit an Insurance Request Form for an individual certificate of coverage via email or fax to immediate place coverage.

A “Premium Letter” is mailed to the customer outlining the insufficient coverage and their requirement to obtain physical damage insurance on the collateral.  The “Premium Letter directs customers to communicate with their insurance agent.  If evidence of sufficient coverage is not received within 14 days, a Certificate of force-placed insurance will be issued and mailed to the customer along with a “Certificate Charge Letter.” 

Coverage goes into effect on the date the certificate is requested, with an annual term.  Coverage is never back-dated to cover a loss that has already occurred, nor is it automatically extended beyond maturity if the loan does not pay off as scheduled.

If a customer presents proof of insurance after they have been issued a lender-placed policy, their lender-placed policy will be cancelled and the pro-rated premium will be will be credited back.  A “Certificate Cancellation Letter” will then be sent to the customer.

 

Creditor Placed Insurance | Coverage

Certificates are issued to the Borrower to protect your interest in the collateral. 

OVERVIEW

  • Premiums are calculated in accordance with the rates filed in each State using the loan balance from the date of the first notice, both on new loans and upon receipt of cancellation/expiration of insurance.
  • Physical damage (comprehensive and collision) coverage is provided under the policy up to the coverage limit listed on the certificate.
  • Policies are issued for a 12 Month Term.
  • Cancellation refunds are calculated using the Pro-rated method.
  • Claims are filed by the Borrower directly with the third party partner.
  • The standard policy limit is $50,000 (higher limits available).
  • The standard deductible amount is $250.