Collateral Protection Insurance (CPI)
Compliance
Vehicle Collateral Protection Insurance (CPI) is a service that tracks whether borrowers maintain required insurance on financed vehicles and places coverage when gaps are found. It combines insurance tracking technology, omnichannel borrower communications, and a self-service portal to minimize force-placed policies. The service is designed for credit unions, banks, auto dealers, finance companies, and mortgage servicers.
When someone finances a vehicle, their lender requires them to carry insurance so the loan is protected if the car is damaged or destroyed. This service monitors whether that insurance stays in place and gently notifies borrowers if proof is missing, stepping in with coverage only when truly needed.
Why it matters for financial institutions
By automatically verifying insurance before sending notices, your staff spends less time on manual tracking and your borrowers receive fewer unnecessary communications. You protect your loan portfolio from uninsured-collateral risk while preserving a positive customer experience that reduces friction and complaints.
Guaranteed Asset Protection (GAP)
Lending
Guaranteed Asset Protection (GAP) is an optional auto-loan product that covers the deficiency between a borrower's outstanding loan balance and the vehicle's actual cash value when the vehicle is totaled or stolen. It protects borrowers from paying out of pocket, reduces lender charge-offs, and generates non-interest income for financial institutions.
GAP is most valuable when a vehicle depreciates faster than the loan balance shrinks. This coverage prevents borrowers from owing money on a car they can no longer drive.
Why it matters for financial institutions
By offering GAP to your members, you protect them from costly deficiency balances while generating non-interest income for your institution. It also helps reduce delinquencies and charge-offs when borrowers are freed from debt on a vehicle they no longer have.
Reviewed July 2026
RM (Risk Management)
Insurance
Risk Management answer block
Reviewed July 2026
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