Up to ten percent of all auto loans will enter "no insurance" status at some time during the term of the loan. This can happen for any number of reasons and does not necessarily mean that valid physical damage insurance is not in force. For instance, a borrower could have changed insurers, a policy could have lapsed but been reinstated, or a new loan record may be received without insurance information. Some borrowers may also have remedied insurance deficiencies after receiving a notice from us but failed to respond to the notice itself. There are a number of reasons why the CPI tracking company doesn't know if a borrower has outside insurance.
Most carriers simply generate CPI notices and certificates based on "no insurance" status. However, State National understands that every borrower situation is unique, and we go the extra mile to avoid unnecessary notices and placements. We query our database before we place a CPI certificate on a borrower who may not have insurance, according to our records. We then make an outbound verification to the last known carrier as one last attempt to avoid force-placement. This process includes accessing other insurers' websites, or making outbound calls to confirm the presence or absence of qualified coverage.
State National's proactive, outbound verification process avoids placing certificates on loans where borrowers have remedied deficiencies or reinstated policies with outside carriers. This verification process is a massive undertaking; however the benefits of our approach to cost savings and borrower relationships make it worth taking this extra step that other CPI providers do not.