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Vendor’s Single Interest (VSI)

Vendor’s Single Interest (VSI)

Vendor’s Single Interest (VSI) insures a lender’s financed vehicle portfolio from damage that is present when a vehicle is repossessed (or skips) and is otherwise uninsured. Lenders purchase VSI in order to manage the risk of uninsured collateral on a portfolio basis thereby improving overall portfolio performance

The Need: American Risk Services’ VSI program addresses a Lender’s problem of borrowers failing to maintain the required auto insurance to protect the financed vehicle. This issue leaves the lender’s portfolio exposed to potential vehicle collateral loss, resulting in charge-offs and diminished portfolio performance.

The Solution – VSI:

ARS’ VSI is provided though a master insurance policy written to cover the lender’s portfolio of reported contracts. Coverage is provided for all new finance contracts or can be written to protect an existing vehicle portfolio, or both. Many states allow the cost of the VSI program to be passed on to the borrowers.

VSI covers losses from theft or physical damage to repossessed collateral where the borrower has failed to obtain and maintain vehicle insurance coverage as required by the finance contract.

Additional coverage can be included in the policy such as:

  • Skip - losses due to the lender’s inability to repossess a vehicle because the lender cannot locate the borrower, co-borrower, or collateral
  • Confiscation - losses due to the lender’s inability to repossess a vehicle because the vehicle has been confiscated by a government official or court and the vehicle cannot be released to the lender
  • Conversion - losses due to the lender’s inability to repossess a vehicle because of the transfer of ownership to an innocent third party
  • Repossessed Property – losses due to the damage or theft of collateral while in the care, custody, or control of the lender after repossession has occurred

The Benefits:

  • Portfolio performance is enhanced
  • Charge-offs due to uninsured vehicles are dramatically reduced
  • Portfolio performance is more predictable without the exposure to uninsured vehicle losses
  • Relatively low per unit costs
  • Coverage can be provided for the life of loan or for annual periods
  • Reinsurance structures allow for loan portfolio risk management and the opportunity to enjoy underwriting profits
  • Fast and efficient claims service
  • ARS exceeds the highest industry standards of security and compliance through SSAE-16 Certification (formerly SAS-70 II)
  • Coverage provided by insurance companies rated ‘A’ (Excellent) or better by the A.M. Best Company




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