Forced-placed insurance is a risk management strategy to protect your auto loan business. Commonly known as Collateral Protection Insurance (CPI), it shifts uninsured risk to a third-party insurance provider. The third-party insurer manages the program and uninsured borrowers bear the cost.

Force-placed insurance gives lenders a way to protect their customers with similar protection they would find on their own. It requires no underwriting and acceptance into the program hinges solely on the loan balance. Automatic coverage is guaranteed, regardless of the borrower’s age, driving history, or residency.

How it Works

The lender monitors the insurance status of all new and existing loans within their portfolio. When uninsured borrowers are identified, the lender issues a notice prompting compliance.

If the borrower fails to get their own insurance despite these notices, lenders can apply CPI to the vehicle loan to safeguard their monetary interest from loss. The associated premium is then added to the borrower’s loan balance at no cost to the lender. As soon as the borrower provides the lender with proof of private coverage, the charge is removed.

Choosing a Provider

To pick an insurance provider that fits your portfolio’s goals:

• • • Consider your loan’s portfolio size and risk tolerance. Monitor skips, repossessions, and delinquencies to identify potential risks. Compare costs and administrative fees.
    • Look for a provider that sends timely, courteous, and clear notices to borrowers and acts promptly upon proof of insurance.
    • Know your ceding fee. It isn’t visible on your annual financial statement.
    • Look for providers with tech-enhanced platforms to streamline efficiencies, reduce errors, and save time.
    • Modern integration and automation capabilities are key. Quick claims processing and payments strengthen the customer experience.

WHY EMPIRE?

Empire Indemnity Insurance Company Risk Retention Group, Inc. is at the forefront of providing force-placed insurance to automotive dealers and lenders. Helping businesses perform better is at the core of everything we do.

Contractual Liability Insurance Policy

Savings, efficiency, and a better customer experience are why lenders switch to our program.

Our tech-enhanced platform keeps lenders up to date with instant access to borrowers’ insurance records, delivers accurate and customized reports, and cybersecure data management for compliance with state and federal regulations.

Finally, our claims process is exceptional – under 24 hours in most cases – resulting in faster payments and happier customers.

 

Our Program

• • • Effortless and cost-effective protection
    • Quick claims processing and payments
    • Increased productivity and efficiency
    • Safe and secure reporting
    • Low administrative fees
    • Revenue opportunities
    • Reinsurance eligible

MAKE AN INFORMED CHOICE

Imagine the possibilities for your business.

Assessing losses, identifying their sources, and evaluating their impact on your bottom line is critical to lending success. When loan losses or charge-offs start to rise, immediate action is required.

Blanket or self-insurance policies do not adequately protect lenders from unforeseen events like natural disasters, where the risk can be substantial. These events may surpass policy limits or leave lenders bearing the entire expense, potentially overnight.

Loan programs targeting first-time buyers or high-risk borrowers are also inadequate. When combined with natural disasters or economic downturns, these risks can quickly spiral.

Earn More. Pay less.