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Blanket is “New”… But is it the Good kind of New?

Unitas Financial Services New Blanket CPI

Charles Kettering liked to say, “People are very open-minded about new things, as long as they're exactly like the old ones.” 

As an American innovator (inventor of the cash register and the electric starter for automobiles), he lived each day to rethink the way things were done. The daily musings of our team here at Unitas aren’t much different. Insurance is our world. It is important, but it shouldn’t take time away from the essential, impactful work that our community lenders are focused on each day. However, as we expand our presence across the country, we’re shocked to discover just how many lenders have insurance programs that are actually slowing them down.

I could take a guess at why:  The word “new” rarely evokes feelings of comfort within the guts of the ‘old-school’ types among us. A new method, process, system, or workflow all necessarily imply that we must leave behind our familiar mode of operation and exert the additional effort that change requires… Ugh. I get it. For good reason, most lenders dread that a ‘new solution’ (despite its promised benefit) will demand time from an already busy day as they are forced to re-learn or re-train to prepare for ‘new.’  

But what if there were an instance of “new” that didn’t require re-learning, re-training, re-orienting processes, or interacting with different technology? Wouldn’t it be “new” of the sweetest variety if a result just eliminated tedious work that grates on customers, risks regulatory discipline, and provides marginal help to the bottom line? Does that sound “new” good to be true? Well, it isn’t! Every day, we help lenders overcome the challenges of portfolio risk management with exactly that kind of “new.” We call it the Blanket 360 Approach. (And yes, many of our clients have regretted not making the switch sooner).

Because we understand that this approach is “new” to many lenders and, therefore, scary, we have become adept at proving that our “new” is the good kind. Let’s take a closer look at why:

Manual insurance tracking and force-placing represent “just the way things have been done” for far too long. We’re finding it hard to believe that so many community credit unions and banks are still stuck with this time-consuming, error-prone, and customer-relationship-harming method of collateral protection that has landed many lenders in regulatory hot water.  Many of these lenders we speak with report “great” decade-long relationships with their current insurance providers. If their current provider is so great, why don’t they already know that a better solution exists? 

Unless they absolutely have to, few CPI providers mention the superior blanket approach to protecting collateral for fear that these more helpful, low-touch programs may not bring in as much premium money as the manual track-and-place program does. Therefore, they don’t offer a lower cost option that would eliminate paperwork and reduce administrative burden. When a competitor mentions a blanket solution, it is not uncommon for an incumbent provider to conjure falsehoods to cast doubt upon any other approach to dissuade the customer from leaving. When this tactic fails, they will eventually admit that they can also grant access to a similar solution. 

What’s “Good New” about a Blanket Approach?

  1. Eliminates insurance tracking and force placing on each of the lender’s secured loan portfolios: Consumer, Real-Estate, and Commercial.
  •  The policy does all of the work for the lender; allowing team energies to be refocused back to core competencies. All eligible loans in each portfolio are automatically “blanketed” by policy coverage. 

Can I really stop tracking Insurance and force-placing CPI coverage on my loans?

  1. Protects Customer/Member Relationships
  • Policy tracking/force placing creates unwanted friction with borrowers.
  •  Online forums like the BBB and Yelp are littered with scathing reviews of banks and credit unions who ‘must be avoided’ because they “scam customers” by unconscionably adding an exorbitant insurance premium to their loan repayment.
  • A Blanket premium is paid by way of a small fee on each loan before being passed to the customer.  With Blanket coverage, all warning notices, phone calls, emails, etc. with borrowers are eliminated.

Top Legal and Compliance Benefits of Blanket Insurance

  1. Regulators View Blanket Policies More Favorably
  • Blanket Policies eliminate the inherent failure points of a manual program. Properties/collateral cannot be missed because coverage automatically applies to each outstanding and new eligible loan within the portfolio.
  • Clients report having received “high praise” from examiners after a review of their blanket policies. One report mentioned a regulator who said he has never seen such a “customer-friendly” and “foolproof” approach to collateral risk management.

Could Your Collateral Protection Insurance or CPI Program Bring You Legal and Compliance Troubles?

Finding superior solutions to address the insurance needs of community lenders is what gets the team here at Unitas Financial Services out of bed each morning. We are happy to serve the fine folks at community lending institutions across the country by providing the best blanket insurance programs in the marketplace that are also the easiest to implement and interact with. We are grateful for our partnerships with the credit unions and banks across the United States who fuel and stabilize the growth of American communities.


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