Single Interest Insurance

AAA

DEFINITION of 'Single Interest Insurance'

Insurance policy for lenders or lessors to protect their security interest in stated property (e.g. cars) in the event of customer default. Financing companies sometimes require single interest insurance for subprime borrowers – people with marginal credit. In most states lenders are permitted to pass on the policy cost to the borrower/customer.

INVESTOPEDIA EXPLAINS 'Single Interest Insurance'

Single interest insurance for automobiles can include various kinds of protection for the seller/financing company or leasing company:
• skip coverage protection – for when a buyer/lessee fails to make ("skips out on") payment
• theft protection
• non-filing protection – for when a lien was not recorded on the title of a vehicle
• protection from physical damage to a repossessed vehicle

RELATED TERMS
  1. Default Probability

    The degree of likelihood that the borrower of a loan or debt ...
  2. Default

    1. The failure to promptly pay interest or principal when due. ...
  3. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  4. Subprime

    A classification of borrowers with a tarnished or limited credit ...
  5. Default Risk

    The event in which companies or individuals will be unable to ...
  6. Exposure Trigger

    An event that causes a policyholder’s insurance coverage to kick ...
RELATED FAQS
  1. What economic indicators are important to monitor when investing in the insurance ...

    Inflation and interest rates are the best economic indicators to monitor when investing in the insurance sector. Unlike with ... Read Full Answer >>
  2. Why do some companies in the insurance sector engage in reinsurance?

    Some companies in the insurance sector engage in reinsurance because they want to reduce risk. Reinsurance is basically insurance ... Read Full Answer >>
  3. Why is the insurance sector considered a low-risk investment?

    Historically, the insurance sector has enjoyed modest returns and perceived safety. It's been a favorite for investors who ... Read Full Answer >>
  4. What price-to-book ratio is considered average in the chemicals sector?

    You can use Microsoft Excel to calculate the loan-to-value ratio if you have the mortgage amount and appraised value of a ... Read Full Answer >>
  5. How are open market operations and monetary policy related?

    An aggregate limit is the maximum amount an insurance company agrees to pay to cover claims during a defined period, generally ... Read Full Answer >>
  6. What caused the European / Eurozone debt crisis?

    Insurance companies base premium pricing on the amount of risk they take on for each individual policy. For instance, life ... Read Full Answer >>
Related Articles
  1. Insurance

    Insurance Tips For Homeowners

    Use these simple ideas to save money and get better coverage for your house.
  2. Home & Auto

    The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.
  3. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  4. Home & Auto

    Used Car Shopping: How To Avoid A Lemon

    Being prepared before buying will save you thousands in the long run.
  5. Active Trading Fundamentals

    Using Logic To Examine Risk

    Know your odds before you put your money on the table.
  6. Home & Auto

    Are My Investments Insured Against Loss?

    Money invested in a brokerage account has some protection, but that doesn't mean you can't lose it.
  7. Options & Futures

    Top Tips For Cheaper, Better Car Insurance

    Accident, theft, vandalism - make sure your coverage will protect you when you need it most.
  8. Retirement

    Alternative Investments In Your IRA

    If you stray off the beaten path when investing your IRA assets, you'll find new potential pitfalls and rewards.
  9. Insurance

    The True Cost Of Owning A Car

    Driving is often the most convenient way to get around, but it'll cost you.
  10. Professionals

    An Advisor's Guide to Prof. Liability Insurance

    A guide to what financial advisors need to know about professional liability insurance.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center