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<\/a><\/figure><\/div>\n\n\n\nGuest\nEditorial<\/strong><\/p>\n\n\n\n June 10, 2019 – There are few actions that a\nlender takes that has more potential for legal claims than a vehicle or collateral repossession<\/a>. Ensuring\nthat your service providers have the right types and amounts of insurance coverage\nis critical to managing the risk. While\nyour contracts may be clear that the service provider indemnifies your\ninstitution in these matters, without the coverages in place, the contractual\nobligation may not mean much. <\/p>\n\n\n\n Unfortunately, there is no single policy that\ncovers the full range of potential risks. \nMultiple policies are required. \nUnderstanding what types policies, key provisions and coverage amounts\ncan be a confusing issue. This article\nattempts to shed light on the matter and provide a recommended framework.<\/p>\n\n\n\n Ask any repossession agency<\/a> and\nthey will tell you that after fuel costs, insurance is their top expense . In\nrecent years, the number of insurance companies that are even willing to write\npolicies for repossession agencies has shrunk dramatically. At the same time, due to the fewer number of\nagencies to spread the risk across, rates have grown dramatically. Even a single claim can result in large\npremium increases for the agency and can jeopardize its existence. For this reason, it is important that lenders\nhave a clear view of what policies\/coverage amounts are really necessary to\nmitigate the risks. Taking a \u201cthe more,\nthe better\u201d attitude that some have adopted in recent years is actually quite\ndetrimental to the industry.<\/p>\n\n\n\n The\nfollowing table summarizes the types and levels of coverage that, based on our\nexperience as a nationwide repossession\nmanagement firm<\/a>, we feel are appropriate. \nNote that the recommendations vary based on whether your institution\nworks directly with repossession agencies or a repossession management firm (forwarder)<\/a>.<\/p>\n\n\n\n Following\nthese guidelines can go a long way towards mitigating risk, but it is important\nto note that things can still go wrong. \nSome insurance companies, in an effort to reduce claims, have inserted\nproblematic policy language\/exclusions in their policies. It takes expert review to identify these\nsituations. One benefit of using a national repossession management company<\/a>\nto manage your repo activity is that it provides your institution with an\nadditional layer of coverage. You only\nhave to rely on proper wording from one company as opposed to multiple\ninsurers.<\/p>\n\n\n\n![\"\"](\"https:\/\/blog.cucollector.com\/wp-content\/uploads\/2019\/06\/alsr_table_6_19.1.jpg\")
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