As an alternative to collateral protection, many Credit Unions choose
blanket single interest coverage. This program eliminates the tracking of
member insurance. The Credit Union pays a premium, usually per collateralized
loan, per month, for coverage for uninsured repossessions.
Pro's of this insurance coverage
Con's of this insurance coverage
No need for tracking of member insurance - takes the place of
collateral protection coverage.
No coverage provided for members not in default - only covers
repossession.
Very simple administration - the Credit Union totals the number of
collateralized loans per month and remits a premium check to the
insurance company.
Lenders have a deductible on each claim. The lender can choose the
deductible desired.
Provides all risk coverage for uninsured repossessions and
"skip" coverage.
Can be an expensive choice if the lenders number of repossessions is
high.
