What Does Single Interest Policy Mean?
A single interest policy is a kind of insurance coverage that aims to protect a financial company that lends or leases property from damage to the property they lease or rent.
The company either buys the policy outright for every loan or lease or charges the amount to the buyer or lessee.
This type of policy is also called “vendor single interest insurance.”
Insuranceopedia Explains Single Interest Policy
Single interest policies are common among (but not limited to) automobile financing companies. It is called “single interest” because it protects the lessor or seller only (e.g. the automobile financing company).
The purchaser of the policy protects themselves 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 person it was sold to decides to let it be repossessed instead of continuing to make payments, the single interest policy of the seller will cover the damage of the repossessed property.