Collateral Protection Insurance – CPI

Collateral Protection Insurance – (CPI) – Things Happen!!!

Physical Damage Insurance for Creditors, Lenders and Lessors

What is Collateral Protection Insurance?

  • Collateral Protection Insurance, or CPI, insures property for physical damage that is held as collateral for credit agreements, loans, and leases.
  • CPI is also known as force-placed insurance or lender’s placed insurance.
  • Collateral Protection Insurance may be single-interest insurance if it protects the interest of the creditor only, or dual-interest coverage if it protects the interest of the creditor and the borrower.
  • CPI insures the creditor’s interest in the collateral for physical damage and unrecovered theft.

How Does CPI Work?

  • We  issue a collateral protection insurance policy to your finance company.
  • You add the customer’s vehicle to your CPI policy.
    1. When your customer fails to provide proof of, or does not having physical damage coverage insurance for your collateral as required in the credit agreement.
    2. Your customer asks to have CPI placed. CPI will fulfill the  physical damage insurance requirements in the credit agreement. (Sometimes CPI can be the less expensive option for the customer, than purchasing physical damage insurance in the open market.)
  • You provide the state required notices and certificates of insurance to the customer for placing CPI. (Some states require you to keep proof of mailing for these forms)
  • You set up a payment schedule to bill the customer for your cost of the CPI.
  • The customer must obtain and maintain liability insurance on the vehicle as required by the State. Collateral Protection Insurance does not provide bodily injury, no fault or liability insurance and does not comply with any state financial responsibility.
  • CPI is voluntary. Your customer can cancel the collateral protection insurance at any time, by providing proof of acceptable insurance to the you. (You refund the customer any unused or wrongly placed CPI premium funds.)

What are the Benefits of CPI?

  • CPI is an easy solution to keep your collateral covered for physical damage.
  • CPI is insurance, so it is easy to explain to your customer.
  • You can lower your repossession rate by placing CPI on the customers who fail to obtain or maintain physical damage insurance.
  • You collect the cost of the CPI from the customer. 
  • Placing CPI, will reduce your charge-offs caused by customers not having physical damage insurance on your collateral.
  • CPI is often a less expensive physical damage insurance option for your customer. The cost of purchasing physical damage insurance in the open market may be higher for your customer.
  • By matching the customer’s CPI billing schedule to the vehicle payment schedule, the CPI payments can be more affordable to your customer. . Example weekly, bi-weekly, or monthly payments.
  • You receive the CPI claim payment when there is a total loss, (The CPI Policy is your policy). You provide the customer an indirect benefit by applying the CPI claim payment to the remaining balance the customer owes on the credit agreement.
  • When a fender bender occurs, you choose the repair shop to repair the vehicle. This can result in faster and more efficient repairs, getting your customer back in the vehicle sooner.
  • CPI will reduce the amount insurance notices you receive and the amount of time you spend processing the notices.
  • You can take positive action on the insurance notices.*
  • Delivering vehicles can be faster with CPI. You can deliver a vehicle knowing physical damage insurance is in place.*

*CPI placement regulations vary from State to State. Please contact us for the regulations in your state.

Why Use the AVP CPI Program?

  • The AVP CPI Program is a simple to use web-based CPI platform, designed for BHPH and Traditional Creditors, Lenders, and Lessors.
  • The AVP CPI Program gives you the control, to place insurance, cancel insurance and manage your portfolio in a web-based portal.
  • It is easy to  keep your portfolio up to date and covered for physical damage.
  • No reports are required. You can add, cancel, and manage CPI customers with less work, than providing a tracking company the information required to track your portfolio.
  • CPI pricing is based on your portfolio and business. Simple pricing makes it easier for your employees to discuss collateral protection insurance with your customers.
  • CPI is an easy program to integrate with your collection department and sales department.
  • You can place CPI in a couple of minutes, print the certificate of insurance and required state forms with a couple of clicks in CPI portal.
  • You can access to detailed reports about your CPI portfolio at anytime, via the CPI Portal.
  • Claims are easy to submit via email.
  • Track your claims online in the CPI Portal.
  • The CPI Policy is written by an “A” rated insurance company, who is licensed and has filed the collateral the protection insurance policy and rates in your State.
  • You choose what will be done with the salvage.
  • CPI is an easy program to startup and integrate into your business.
  • CPI is compatible with a reinsurance program.

This is an overview of Collateral Protection Insurance. Please contact AVP for details and the collateral protection insurance program applicable in your state.



AVP - Assured Vehicle Protection

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