We’re kicking off 2026 with energy and excitement! This month, our team is connecting with credit unions, attending chapter events, and sharing how ISI helps make collateral protection insurance easier. We can’t wait to meet new faces, reconnect with familiar ones, and make this year one full of meaningful partnerships and growth! | | Louisville Chapter of Credit Unions Chapter Meeting
Speaker: Dan Mason, LMPD
Louisville, KY
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Northeast TN Chapter of Credit Unions Chapter Meeting
Speaker: Kindle Conkin, Eastman CU
Johnson City, TN
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Claims Paid by Claim Type
Collateral Protection Insurance (CPI) is designed to protect the Lender from charge-offs resulting from damaged collateral that is not covered by the borrower’s primary insurance.
The most common scenario occurs at repossession, when the Lender discovers the collateral has sustained physical damage that was never repaired because the borrower failed to maintain proof of insurance throughout the life of the loan. As a result, the collateral’s value is reduced, increasing the potential charge-off.
This is where CPI steps in—not necessarily to “save the day,” but to help reduce the loss caused by the diminished value of the collateral. These claims are commonly referred to as repossessed physical damage claims, which represent the most frequent type of CPI-related claim. In a properly functioning CPI program, the majority of claims paid to your Financial Institution should—and typically do—fall into this uninsured physical damage category.
One indicator of an unbalanced CPI program is when uninsured physical damage claims are not the most common claim type. For example, a program may be considered unbalanced if skip claims or premium deficiency claims exceed physical damage claims. When this occurs, it suggests the Lender may be relying on CPI to offset losses outside of its primary purpose, which can lead to an unfavorable claims-paid-to-premium-collected ratio and potentially impact the long-term viability of the program.
While CPI programs may include various endorsements that provide additional coverage to the Financial Institution, the core purpose of CPI remains the protection against uninsured physical damage. For this reason, the percentage of physical damage claims should be higher than any other claim type within the program.
What is your most common claim type? Reviewing claims paid by type is a best practice and helps ensure your CPI program is functioning as intended and remains balanced over the long term.
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President
ISI
tmaccurdy@isicpi.com
704-957-5024
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ISI is an administrator of Collateral Protection Insurance (CPI) and Blanket Lenders Single Interest (BLSI) for financial institutions. We provide insurance, lending, and marketing products to the financial institution marketplace. Our mission is to deliver the best products and services in the industry through responsive service, comprehensive coverage, and advanced technology. We combine the lender's vision and our proven plan to create a portfolio that matches the lender's needs for a successful program and partnership.
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