Single Interest Policy
What Does Single Interest Policy Mean?
A Single Interest Policy is a type of insurance coverage designed to protect a financial company that lends or leases property from damage to the property they lease or rent.
The company either purchases the policy outright for each loan or lease or passes the cost onto the buyer or lessee.
This type of policy is also known as “Vendor Single Interest Insurance.”
Insuranceopedia Explains Single Interest Policy
Single interest policies are commonly used by, but not limited to, automobile financing companies. The term “single interest” refers to the fact that the policy protects only the lessor or seller (e.g., the automobile financing company).
The purchaser of the policy, typically the financing company, is protected from damage to the property being leased or lent. For example, if a car financed by a company is involved in an accident and the buyer decides to have it repossessed instead of continuing to make payments, the seller’s single interest policy will cover the damage to the repossessed vehicle.
