May 19th, 2020
Monitoring insurance coverage is an ongoing concern for equipment leasing and finance companies. It’s necessary to ensure your assets are protected. But doing it well can be cumbersome, time-consuming, and confusing. Can a lease insurance program help? Here’s some information to help you understand how a lease insurance program can work for you.
First, what is lease insurance?
- Lease insurance is coverage that protects the leasing or finance company’s asset portfolio
- Lease insurance coverage also protects lessors from 3rd party liability claims arising from the use of the equipment or vehicles by lessees or borrowers
- Lessees and borrowers use this coverage to satisfy the insurance requirements in their contracts, and protect the equipment and vehicles they lease or finance from damage or loss
Then what is a lease insurance program?
A lease insurance program provides insurance coverage through policies specifically designed for leased and financed equipment. It also tracks the insurance coverage on each agreement to ensure that the leasing or finance company is not put at risk through insufficient or nonexistent coverage, policy expiration or cancellation.
The lease insurance company handles all insurance-related responsibilities:
- Communicating with lessees/borrowers on the lessor/finance company’s behalf
- Assessing lessee/borrower insurance clause compliance, or lack thereof
- Processing coverage under the lessor/finance company’s policy, if needed
- Providing customer service to lessees/borrowers and their insurance agents
- Handling claims under the lessor/finance company’s policy
- Monitoring alternate insurance for expiration or cancellation during the lease term
The leasing or finance company retains the billing and collection of insurance charges from lessee/borrowers who use the insurance program coverage, earning fee income.
The benefits of lease insurance programs:
- Outsource burdensome insurance monitoring
- Strengthen portfolio values
- Provide valuable insurance services to customers
- Extra fee income
If you would like to learn more about the benefits of implementing a lease insurance program, read the post Eight key benefits of a good lease insurance program or contact us.