1.Increase in Borrower Insurance Cancellations
It is being predicted that loan delinquencies will rise through the summer months. Prior to a loan becoming delinquent, the cancellation of a borrowers primary insurance policy usually happens first.
2.Increase in Borrower Deductibles on Primary Insurance Policies
If a borrowers does not cancel their insurance policy, they may increase their deductible in an effort to reduce their premium.
3.Increase in Insurance Policies Missing the Loss Payee Clause
Insurance carriers are overwhelmed with administrative tasks due to new procedures as a result of COVID-19. New procedures can result in errors and one of those errors is the binding of coverage without the acceptable lien-holder clause being listed on the policy.
4.Increase in Conversion and Confiscation (Skip) Claims
If a borrowers is unable to pay their loan, they may do everything they can to keep their vehicle. This could include the borrower hiding the collateral to prevent repossession.
5.Decrease in Primary Insurance Claims
COVID-19 has required many borrowers to stay at home and has resulted in limited travel. The less borrowers are traveling, the lower the risk of an auto accident. Studies are showing that Americans are driving approximately 10% less due to the pandemic.
We stand ready as a resource and are happy to provide additional information pertaining to primary insurance, state departments of insurance and collateral protection insurance. Please feel free to call me directly with any questions pertaining to your borrowers or financial institution, 704-957-5024.
Best Regards,
