Vendor's Single Interest

Vendor’s Single Interest (VSI), also known as Blanket VSI, is a specialized insurance policy that provides portfolio-wide coverage under a single master policy. Unlike traditional collateral protection programs, Blanket VSI eliminates ongoing insurance tracking and force-placed coverage, helping lenders reduce uninsured risk and streamline loan servicing operations. 

A Vendor’s Single Interest (VSI) policy protects lenders when collateral becomes uninsured and is damaged, totaled, or stolen. It provides portfolio-wide coverage under a single master policy that applies across the entire loan portfolio once effective. By covering all eligible loans, VSI eliminates the need for post-close insurance tracking and force-placed insurance, helping streamline servicing operations. 

What is Vendor's Single Interest?

Vendor’s Single Interest (VSI), also known as Blanket VSI, is a lender-focused insurance solution that provides continuous protection for collateral after loan closing. Once a policy is in place, coverage automatically applies to all eligible loans, ensuring the lender’s financial interest is protected if borrower insurance is canceled, lapses, or becomes insufficient.

Unlike traditional collateral protection programs, VSI does not require ongoing insurance tracking or force-placed coverage. This allows lenders to reduce administrative burden while maintaining consistent protection across their loan portfolio.

As a streamlined alternative to Auto Insurance Tracking services and Collateral Protection Insurance (CPI), Vendor’s Single Interest helps improve servicing efficiency, supports compliance, and reduces exposure to uninsured losses.

  • Features

  • Benefits

  • Coverages

  • Eligible Collateral: Autos, Vans, Light Trucks, Motorcycle, RV, Watercraft, Mobile Home, Heavy Trucks with an option to add additional collateral types.

  • Passing of Premium: depending on State Regulations, lenders may pass the premium cost to the borrower.

  • Uninsured Physical Damage Coverage: Protects the lender from uninsured damage or theft of the loan collateral, occurring before or after repossession.
  • Skip & Confiscation: protects the lender against loss of collateral when borrower and vehicle cannot be located or when the vehicle has been seized by a public authority.
  • Security Interest Non-filing: Protects the lender from a lien filing error or omission preventing repossession and sale of the collateral.

  • Modified Actual Cash Value (GAP) coverage pays the difference between a vehicle’s actual cash value (ACV) and the principal loan balance in the event of a total loss.
  • Flexible Limit of Liability offers lenders options based on the market and lending procedures. 
  • Flexible Deductible Options: gives the lender the ability to reduce premium rates.
  • Assumption of Coverage: provides coverage on the entire existing loan portfolio at policy inception with no additional upfront cost.
 
 
 
 
 
 
  • Assumption of Coverage ensures seamless portfolio protection from inception.

  • Eliminates the need for post-loan-closing insurance tracking.

  • Prevents borrower disputes over false CPI placements.

  • Eliminates negative borrower interactions regarding insurance documentation.

  • Simplified administration with zero data file required.

  • Enhances audit and compliance reviews by ensuring insurance full portfolio coverage.

  • Provides an easy, efficient claims filing and settlement process.

  • Helps reduce loan defaults and the need for loan rewrites.

  • Minimizes charge-off expenses.
  • Physical Damage & Theft Protection: provides blanket all-risk coverage for damage or theft prior to repossession up to the policy limits.

  • Skip and Confiscation Protection: covers losses caused by the inability to locate a borrower or obtain collateral seized by a public official.
  • Modified Actual Cash Value (GAP): pays the difference between the actual cash value (ACV) of a vehicle and the principal loan balance in the event of a total loss.
  • Non-Filing (Errors & Omissions): covers losses caused by improperly filed liens or unfiled liens on covered collateral.
  • Repossessed Physical Damage: covers physical damage losses sustained within a specific timeframe after repossession of the collateral.

Optional Coverages Available:

    • Mechanical Breakdown Expense.
    • Broad Form Skip.
    • Mechanics Liens.
    • Repossession Storage Expenses.
    • Additional repossession and return expenses.
    • Primary insurance deductible up to maximum limits.
 
 

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Vendor's Single Interest FAQ's

 
 
 
 
 
 
 
 
 
 
 

How does a Vendor’s Single Interest (VSI) policy work?

A Vendor's Single Interest (VSI) policy automatically covers all eligible loans in the portfolio once in effect. While lenders must verify borrower insurance at loan closing, the policy eliminates the need for ongoing insurance tracking post-close. Coverage applies when uninsured collateral is damaged, totaled, or stolen, provided the lender has repossessed the collateral.

What does a Vendor's Single Interest (VSI) policy cover?

A Vendor's Single Interest (VSI) policy typically covers physical damage and theft of vehicles, loss due to theft or skip, repossession‑related damage, and other risks specified in the policy, such as modified actual cash value (gap) coverage and non‑filing protection.

How does Vendor's Single Interest (VSI) differ from Collateral Protection Insurance (CPI)?

Vendor's Single Interest (VSI) is a blanket solution that eliminates the need to track individual insurance policies and force-place insurance coverage after loan closing, while Collateral Protection Insurance (CPI) programs often require tracking and force-placing of coverage when borrower insurance lapses. Blanket VSI simplifies administration and operational efforts.

What are the benefits of a Vendor’s Single Interest (VSI) policy?

A Vendor's Single Interest (VSI) policy helps lenders reduce administrative burden by eliminating insurance tracking and force‑placement actions, protects financial interest in collateral, supports compliance, reduces charge‑offs, and improves loan servicing efficiency. It also can improve borrower experience by avoiding force‑placed insurance notifications and associated costs.

How are claims handled under a Vendor’s Single Interest policy?

Claims are generally filed when collateral is repossessed or otherwise subject to a covered loss (e.g., damage or theft). An adjuster assesses damage and determines the claim payout up to the policy limits.

Additional Collateral Protection Insurance Solutions for Lenders

 Risk management solutions to protect loan portfolios, reduce coverage gaps, and simplify insurance tracking.

 
 
 
 
 
 
 
 
 
 
 
 
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Vendor's Single Interest

 
 
 
 
 
 
 
 
 

A Blanket VSI policy eliminates the need to track insurance policies, send warning letters and force-place CPI coverage after loan closing. 

  • Check Mark Collateral Protection Insurance Alternative
  • 2 Check Mark Website Eliminates Insurance Tracking Post-Close
  • 2 Check Mark Website Provides Physical Damage Coverage
  • 2 Check Mark Website Additional Coverages Available
  • 2 Check Mark Website Simple Reporting & Remittance
GET STARTED WITH BLANKET VSI

Auto Insurance Tracking

 
 
 
 
 
 
 
 
 
 

Outsource all the duties associated with opening insurance renewal mail, tracking insurance policies, sending warning letters and force-placing coverage.

  • 2 Check Mark Website Third-Party Insurance Tracking
  • 2 Check Mark Website Notifications Handled By Third-Party
  • 2 Check Mark Website CPI Coverage Placed When Needed
  • 2 Check Mark Website Transfers Risk of Non-Compliance
  • 2 Check Mark Website Access to Real-Time Online System
EXPLORE AUTO INSURANCE TRACKING

Collateral Protection Insurance

Gain access to a user-friendly system which generates compliant warning letters and allows lenders to easily add, cancel and edit CPI coverage when necessary.

  • 2 Check Mark Website Add, Edit or Cancel Coverage Online
  • 2 Check Mark Website Automated Warning Letter Cycle
  • 2 Check Mark Website Physical Damage Coverage Included
  • 2 Check Mark Website Additional Coverage Available
  • 2 Check Mark Website Simplified Monthly or Annual Billing
EXPLORE CPI

Read our Guide to Vendor's Single Interest to see how it simplifies risk management

 

 
 
 
 
 
 
 
READ THE GUIDE

Download our Vendor's Single Interest eBook on reducing uninsured risk

Lenders across the country have moved to a Blanket VSI policy for its increased loan servicing efficiencies.

 
 
 
 
 
 
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VSI eBook Cover Page

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