VSI Insurance

Vendor's Single Interest (VSI) insurance is a lender-purchased policy protecting the lender's interest in a financed vehicle if it is damaged, destroyed, stolen, or if the borrower skips. It covers only the lender's exposure, not the borrower's.

VSI is commonly used by BHPH dealers and subprime lenders to protect their portfolio against uninsured losses. Dealers carrying in-house paper should understand VSI coverage terms, cost structures, and how it interacts with borrower insurance requirements in the retail installment contract.