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What Is a Blanket Policy?

Updated: Aug 23, 2023

Gusta Stanford and Shellee Britt recently discussed with us, "What is a blanket policy and how does it benefit financial institutions?"

Gusta Stanford and Shellee Britt discussed "What is a blanket and how does it benefit financial institutions?"

What is a Blanket Policy?

If a financial institution is seeking a tried and true, efficient strategy for protection against loss on a defined type of portfolio, the blanket policy is a great option. The term "Blanket" describes a type of policy that covers, or blankets, loans with certain types of collateral. Blanket policies are also referred to as Blanket Vendors Single Interest (VSI) and Blanket Lenders Single Interest (LSI). These terms are interchangeable, as Vendor and Lender both refer to the financial institution.

How does a Blanket Policy benefit Financial Institutions?

A blanket policy protects the lending institution against loss in case of repossession of damaged collateral. These situations could cause unprotected and potentially large losses. There is no tracking of insurance required, which provides efficiencies and savings through streamlining staff workload. This type of policy eliminates the cash flow and administrative efforts that happen with force placed policies.

What type of collateral are eligible to be covered?

What types of collateral are eligible to be covered?

Multiple types of collateral are eligible for this coverage such as:

  • Vehicles

  • RVs

  • Boats

  • ATVs

  • Jet Skis

  • Commercial Vehicles

Coverages include Physical Damage on a repossession with no insurance, Skip, Confiscation, and others.



Question: What type of collateral is covered?

Answer: Rolling stocks like autos, SUVs, vans, pickup trucks, motorcycles, ATVs, RVs, watercraft, and farm tractors.

Question: Is insurance tracking required?

Answer: No, the only policy requirement is to inform the borrower that they must maintain insurance on the collateral during the term of the loan, which can be accomplished with a signed Agreement to Provide Insurance form.

Question: Are there loan balance and loan term limits?

Answer: Yes, the loan balance limit is up to $100,000 and the loan term limit matches the financial institution's lending practices.

Question: How often is the premium paid?

Answer: Monthly for the new loans made the previous month.


ABOUT ROSS & YERGER Ross & Yerger – one of the largest independent, privately-held insurance agencies in the Southeast – was established in 1860 and is headquartered in Jackson, MS. The firm has 127 employees throughout their five offices in Jackson, Tupelo, Hattiesburg, New Orleans, and Memphis. Ross & Yerger is licensed in all 50 states and offers a full range of brokerage services, including insurance, employee benefits, bonds, financial services, and risk management consulting. For more about Ross & Yerger, visit www.rossandyerger.com.


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