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Vendors Single Interest Coverage

Vendors Single Interest Coverage

Definition

Insurance purchased by financial institutions that protects against financial loss from physical damage to property (collateral) on which loans have been made. Such coverage applies in the event the borrower does not have physical damage coverage in place. Vendors single interest insurance covers only the outstanding balance on the loan. Even though the borrower frequently pays the premium, he or she receives no insurance protection of his or her equity under such policies.

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