Collateral Protection Insurance

One of the most difficult tasks in a financial institution is balancing risk with favorable lending practices. As a measure of risk mitigation in the case of lending where collateral, such as autos, is concerned it is standard practice to require insurance covering such collateral. When your client fails to voluntarily cover your mutual asset, a higher risk than is anticipated occurs. Hence, the need for Collateral Protection Insurance (CPI) was created. Oftentimes this product seems to be a contentious, often misunderstood tool. Calger and its affiliates have a great answer to this dilemma! Our CPI offerings are varied and can be tailored to meet your financial institution's needs and requirements.

Traditional CPI is available where premium on forced place policy paid by a member is a % of the loan balance. But our better options include a Co-op product for small financial institutions for a low cost that can be adjusted depending on the pool of financial institution losses or a stand-alone product for larger institutions.

Also available is a low-cost option at a much lower rate to your clients than traditional that is a set fee rather than a % of loan balance. The advantages of having a policy to cover comprehensive and collision on your collateral for a lower fee than the traditional % based premium are many – including having less repossessions because your member can now afford the payment! Another advantage is that in many instances there is no need for a repossession in order to file a claim under the CPI policy issued by our carrier.

Contact Calger for more information on this much needed and often misunderstood product and let us talk about the great options that you can be afforded through our partners – experienced and knowledgeable that specialize in this field.