Single Interest Insurance

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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

    1. The failure to promptly pay interest or principal when due. ...
  2. Default Risk

    The event in which companies or individuals will be unable to ...
  3. Default Probability

    The degree of likelihood that the borrower of a loan or debt ...
  4. Subprime

    A classification of borrowers with a tarnished or limited credit ...
  5. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  6. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
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