Ditch the call center: The role of automated auto insurance monitoring in collateral protection insurance

Auto insurance and collateral protection insurance (CPI) are intrinsically connected. There is not one without the other, and for the companies that provide and manage CPI for dealerships and lenders, the ability to easily monitor auto insurance is one of the most important strategies they can invest in. 

What is collateral protection insurance?

Collateral Protection Insurance (CPI) is a type of insurance that lenders or dealerships purchase to protect their financial interest in a vehicle when the borrower does not maintain the required insurance coverage. It ensures that the vehicle remains insured, safeguarding the lender or dealer’s investment.

The relationship between auto insurance and CPI

CPI is crucial for lenders and dealers because it acts as a safety net, ensuring continuous insurance coverage for financed vehicles (e.g. protecting their collateral). In order to provide collateral protection, providers, like State National, must have a robust system to monitor and track insurance coverage of financed vehicles, ensuring compliance with specific state regulations and lender requirements. It is crucial to monitor the consumer's auto insurance thoroughly and consistently to ensure continuous coverage, as any lapse can expose the dealership to significant financial risk. 

Problems with manually verifying auto insurance 

Verifying auto insurance has not always been quick and easy, and, in most cases today, it still isn’t. 

Historically this verification involves traditional (and very manual) processes.  Waiting on hold with insurance companies via call centers, managing physical paperwork, and back-and-forth emails with consumer insurance providers have managed to stall the evolution of access to auto insurance. These methods are not only labor-intensive, but are also fraught with delays and inaccuracies, which ends up costing CPI providers time, money, and patience. There are plenty of challenges, many of which can be overcome simply with automation.

How does automated auto insurance monitoring work?

Automated systems are designed to facilitate data exchange and verification processes securely from an insurance carrier to the requesting organization via API connection. For CPI providers, this work can typically be done by working with a SaaS platform, like MeasureOne, who have built the systems already to connect providers with auto insurance data. Here’s what the process looks like for continuous auto insurance monitoring:

1. The CPI provider begins the request for borrower auto insurance monitoring.
2. As a part of the auto insurance verification flow, the borrower receives the request to provide their auto insurance information either by logging into their insurance provider or by uploading the requested documentation.
3. On the backend, the MeasureOne transmits that consented data back to the CPI provider instantly, enabling a completely seamless verification process. This information can be pulled regularly based on the CPI providers’ needs.

It’s that simple for the CPI provider, the dealer or lender, and the borrower.

4 reasons CPI providers should use automation to streamline auto insurance verification

Today, CPI providers are already focusing on automated services and tools to drive operational efficiency and ensure their customers have a substantial, streamlined solution to protect their assets. Using automation to enhance claims processing, access insurance policy data, and track insurance are all pieces to the larger puzzle of operational efficiency. Adding automated insurance monitoring to the list is an easy additional win. 

With automated access and verification of insurance data using solutions from MeasureOne, for example, proof and types of auto insurance can be captured and embedded in a CPI provider’s workflow to monitor insurance on a regular basis, ensuring that the insurance status of financed vehicles is always up to dateFor CPI providers, automating this verification leads to significant opportunities:

1. More efficiency and more accurate verifications

Automation can help CPI providers instantly access insurance data on a recurring basis, significantly reducing the time needed for verification. This quick and consistent turnaround means fewer delays in processing and maintaining up-to-date records, enhancing overall operational efficiency. Automating verification and monitoring directly from a borrower’s insurance account eliminates the potential for human error in the monitoring process and guarantees that the information provided is accurate and up to date, including for processing uploaded documents, reducing the chances of missed details or even insurance fraud. 

2. Improved compliance and risk mitigation

Automated systems can be programmed to adhere to explicit legal or regional requirements, ensuring that CPI providers always comply with insurance regulations no matter how specific. This protects the provider and lender from potential legal issues and penalties. By using automated systems to verify and monitor insurance, CPI providers can better assess any lapses in coverage or the risk associated with each borrower and allow for more informed decisions regarding the terms of insurance coverage.

3. Cost savings for CPI providers and their customers

Automating insurance monitoring can also save CPI providers money in the long run. It reduces the need for manual labor, paperwork, and follow-up, allowing staff to focus on other critical tasks.

4. Improved customer experience

Dealers, lenders, and their borrowers are increasingly looking for a hassle-free experience when managing vehicle financing. CPI providers that automate insurance monitoring can help provide just that, making the process smoother and more efficient: 

• Improved CX for lenders and dealers: Automated insurance monitoring enables real-time insurance verifications, enhancing efficiency and accuracy. This type of automation requires minimal work to administer, freeing up time and saving on labor costs. Plus, automation means that CPI providers have the ability to set up the frequency with which they want to verify coverage. With access to real-time updates and reporting on demand, CPI providers can establish confidence in their tools for the lenders and dealers they service. 
• Improved CX for borrowers: Borrower involvement in auto insurance verification and monitoring can inevitably cause friction—between reminders to share specific documentation and phone calls and emails with their insurance providers to get the documents or data needed, it’s no wonder borrowers may get frustrated by the process. While the borrower has to link their insurance account or upload their needed documentation, automated insurance monitoring eliminates that manual conflict and provides a better borrower experience overall. 
  
  

The future of CPI with technology

CPI providers dedicated to protecting their customers’ portfolios should invest in proprietary and emerging technology solutions to enhance operational excellence, ease of use, seamless systems and processes, and exceptional client and borrower experiences. From AI-driven softwares to process loan information or borrower data, to enhanced claims management systems, technology for CPI players will advance their connections with lenders and dealers through efficiency, cost-savings, and customer retention. 

And now it’s time for these players to add automated insurance monitoring to their suite of services. 

MeasureOne’s solution for CPI providers

MeasureOne is a leading provider of automated auto insurance verification solutions including auto insurance monitoring.

In the industry of insurance verification, accuracy is non-negotiable, and, fortunately, with MeasureOne, monitoring auto insurance data is 100% accurate, instant, and can be integrated directly into your current flow. Automating the monitoring process with MeasureOne offers numerous benefits for both your CPI business and your customers, such as:

• Recurring verification of auto Insurance: Using scheduled, automated API queries and notifications, periodically and regularly monitor borrower auto insurance. If coverage lapses or changes, be updated and take action immediately.
• Marketing-leading coverage/conversion: 95% coverage of auto insurance carriers. 
• Lowest costs in the space: MeasureOne’s platform gathers data by API rather than manpower to verify documentation and connect to third parties and comes at a lower cost than leading competitors.
• Custom auto insurance data: Integration with third-party systems, customizable workflows, and development of unique features enhance the tool's versatility and adaptability to different business needs.
• 100% accurate document processing: Your trusted fallback solution to the credentialed solution, supporting all types of documents. Customers can also specify any combination of manual upload document preferences to further customize the data collection process. That’s proprietary, automated, deterministic document and image processing with 100% accuracy. 

MeasureOne’s solution is backed by data that demonstrate its effectiveness in providing accurate and reliable insurance monitoring. Try it  for 14-days free!