VSI = Very Simple Insurance

Lee Mason Blog Vsi Very Simple Insurance Car Damage Slightly

November 7th, 2022

  • Vendors Single Interest or VSI
  • Lenders Single Interest or LSI
  • Blanket Lenders Single Interest or BLSI

These are all names for the same simple insurance, that protects an auto lending institution against Uninsured Damage or Theft to the vehicle collateral. Plus protection against Skip by the borrower.

We sometimes half-jokingly say 'VSI' stands for 'Very Simple Insurance.' Because it is so simple for an auto lender to use. A small one-time premium is charged per loan and reported based on the total number of new loans originated during the month, and that’s it.

Just a summary report: # of Loans x $ Premium rate. No individual borrower/member loan details are submitted. (Less data leaving the lender’s operations center means more data privacy and cyber security for the lender.) No insurance mail to sort and to send. The lender can shred all insurance mail. (Again, that means less borrower information leaving the lender’s care, custody & control.) Best of all, no insurance premiums to force-place and then to try to collect back from the borrower.

These days we most often use the term Blanket Lenders Single Interest (or Blanket LSI), because ‘blanket’ is the best description of the broad collateral/portfolio protection (including skip coverage) being offered.

[Keep it simple: It’s come to our attention that some credit unions are being asked by a certain large agency to sign a ‘separate contract’ alongside their Blanket LSI policy. Don’t do it. It’s not necessary; and it’s not ethical for an agent to make an outside contract that affects the terms & conditions of an insurance policy. The insurance policy is a stand-alone contract.]

If you’re not one of our many, many Blanket Lenders Single Interest clients currently, please contact us for a proposal. That’s simple too.

And don’t forget we offer Blanket Mortgage Hazard Insurance and Mortgage Impairment: two simple ways to blanket protect your mortgage loan portfolio.