Dimont has unveiled its insurance verification service, which allows auto lenders and their dealer partners to verify insurance coverage for potential borrows at the point of origination before funding the loan, Jeff Anderson, Dimont’s senior vice president of auto services, told Auto Finance News.
The new service was born out of requests from its lending partners in the nearprime and subprime space, Anderson said. “[Auto lenders] may have a subset of loans in their portfolio that, instead of just verifying that there is insurance on the car at the time of purchase, they want to make sure that they’re listed as the lienholder,” he said, adding that lenders want to be listed as lienholders to help mitigate insurance fraud and manage risk of losses. Anderson Brother’s Bank and Westlake Financial are lenders that work with Dimont in the subprime space, he added.
Dallas-based Dimont’s new insurance verification service is the latest addition to its insurance monitoring platform, which allows lenders to monitor the insurance coverage of their managed assets in real time. Lenders can see changes to coverage, including cancelations, expirations or changes to the deductible, Anderson said.
In addition, the specialty insurance company uses that information to assist lenders with their auto claims or repossession claims, Anderson said. “We’ll see if we can file a claim against the primary insurance company that covered the vehicle at the time of repossession to offset any deficiencies the borrower may have had on the loan,” he said.
Last year, Dimont’s chief executive Denis Brosnan said uninsured rates in subprime portfolios were between 35% and 40%. “That number has been pretty stagnant for the last five or six years,” Anderson confirmed.
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