Single interest insurance may also be known as vendors single interest insurance. If you are a lender or financing company, then you may need single interest insurance to cover collateral or other high-value items that you provide loans for.
Lenders single interest insurance protects you if something happens to the property.
Purpose of Single Interest Insurance
As a lender, you take a risk when you offer a loan to anyone. If you provide a loan for someone to purchase a vehicle, usually, the person would have to show you proof of insurance. However, there are cases where the person buying the car may not have proof of insurance. In other instances, the borrower may have weak credit and may look like he or she is likely to default.
Advantages of Single Interest Insurance
One of the main advantages of a single interest insurance policy is that it can cover your interest in high-value property. These policies can be purchases as blanket coverage or gap coverage to reimburse for the difference of the value and the loan principal. When you have single interest insurance, your contents may also include:
- Lien coverage
- Repossession coverage
- Theft protection
As a lender, you have to be able to protect the asset that you invested in.
When you co-own property, one of the best ways to protect your interest in the high-value property is through adequate insurance coverage.