We're Often Asked...

What is Collateral Protection Insurance (CPI)?

Collateral Protection Insurance (CPI) is a valuable way to protect your loan risk from loss when a financed car or mortgaged home becomes uninsured by your borrower. Whether it is early in the loan or at any point later - CPI keeps you covered and extends coverage to the member so that you don't have to repossess the vehicle or foreclose on the home in order to protect your interests and to receive valuable benefits.

How does the monthly premium work?

The Premium Alternative™ (monthly premium) is applied only to the months that insurance is actually needed. The monthly premium declines as the loan balance declines reducing the impact of interest charged to the member. The credit union assets remain fully protected while the member gets back on track financially.

What is the advantage of monthly over annual premiums?

Research tells us that more than 50% of your members will provide proof of insurance within the first 6 months. So why add a year's worth of premium when you really have no idea how long the member will need CPI? Plus, the number of refunds will decrease while providing your member with premium savings.

How do credit union members view the monthly premium method you offer?

A borrower that is already in a tough financial situation will appreciate the care that the credit union has taken to minimize the affect of CPI premium by only assessing as it is needed. When his economic circumstances turnaround he recognizes that the credit union has looked out for his best interests even through tough times. Further, the borrower is not discouraged by the significant and compounding add-on that can drive one to give up making payments altogether. The Monthly Premium is a method that your borrower can work with and from which he can recover. That's good news for you and for your borrower.

What is the refunding advantage of monthly premiums?

One integral characteristic of the monthly premium process is the added benefit of a "pay-as-you-go" method. This is a welcome alternative as it keeps your members from experiencing the way annual premiums are earned. When an annual policy cancels early - very typical with CPI - the Rule of 78ths earning method has an up-front loaded retention factor. This does not exist with Monthly Premiums. When the borrower provides his own coverage or if repossession occurs, then the monthly premium alternative means that premiums simply cease. This significantly reduces refund activity and refund volume. Borrowers are no longer left wondering why they didn't receive one-half of their premium back when they only had the policy for one-half of the time!

What is the interest impact advantage of monthly premiums?

With annual premiums, paying twelve months of premium in advance and charging interest up front on the full twelve months compounds your risk on an already "at-risk" loan. With monthly premiums, interest is only charged on the portion of the premium that is being added to the loan for that month. Our clients appreciate that they did not throw "good money after bad!"

Are insurance ID cards acceptable to secure verification?

Yes. Support will accept the ID card to secure the verification process.

Can you post premiums electronically?

Yes. As long as your data processor has the capability to post electronically, we will post premiums and refunds directly to the member's account.

Do you insure and track real estate loans?

Yes. We insure and track first and second mortgages and HELOCs.

Do you still have questions?

Click here to navigate to our contact page and complete the online form or give us a call at 800.444.5465. We would be happy to answer any questions you may have.