Bank Insurance - Lender’s Single Interest Insurance Policies
By Scott Simmonds, CPCU, ARM,CMC

Lender’s Single Interest insurance protects the bank from loss or damage to personal property that is the collateral for loans – cars, trucks, boats, RVs, snowmobiles, and other personal property. Coverage is provided for the bank’s interest and not that of the borrower.

• Be careful of overlap with the mortgage impairment insurance on mobile homes.

• Coverage is usually included for repossessed property. Policies can include protection for title errors and omissions as well.

• Most lender single interest forms are paid for on a reporting form basis. The bank reports the value of secured loans and a premium is charged for the exposure.

• Coverage can include repossession expense reimbursement, mechanic's lien reimbursement, gap/deficiency coverage, borrower deductible coverage, and vehicle location / skip reimbursement.

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