Collateral Protection Insurance (CPI)
If proof of acceptable insurance coverage, as defined below, is not provided within 15 days of the contract date, First Basin Credit Union will secure a TEMPORARY insurance policy, commonly known as Collateral Protection Insurance (CPI). CPI is simply a policy to temporarily protect First Basin's collateral from financial loss in the event of damage or total loss. The monthly premium of CPI will be added to the borrower's monthly loan payment until proof of an acceptable insurance policy is provided.
If it is determined there was a lapse in borrower's coverage, the borrower will be charged for each month of no coverage. For example, if an insurance policy was canceled three months ago and First Basin Credit Union secures CPI, the borrower would owe the monthly CPI fee + the loan payment + the CPI fee for the three previous months of lapse in coverage.
Acceptable Insurance Coverage
First Basin Credit Union defines acceptable insurance coverage as a policy that meets the following:
- Collision coverage: $500 maximum deductible
- Comprehensive coverage: $500 maximum deductible
- Insured’s name and address
- Vehicle description and VIN
- Policy number and current policy period
- First Basin Credit Union listed as the “Loss Payee”
- No excluded drivers on the policy
What does CPI do for me as the borrower?
NOTHING. CPI does not protect you in any way. Collateral Protection Insurance only protects First Basin Credit Union from loss of collateral.
But isn’t CPI an insurance policy?
As mentioned, CPI only protects First Basin Credit Union from financial loss and DOES NOT protect the borrower from financial liability like a traditional insurance policy. CPI is NOT a personal insurance policy and is only meant as TEMPORARY protection for First Basin. While there are different levels of financial coverage, a traditional insurance policy with comprehensive and collision coverage protects you from the financial liability resulting from personal injury and property damage(s).
IMPORTANT - CPI is not considered personal insurance!
CPI is not an acceptable form of insurance coverage in the event you are involved in a traffic stop. In the State of Texas, you are in violation of section 601.191 of the Texas Transportation Code if you do not have insurance on your motor vehicle and you may receive a citation. CPI is not considered personal insurance. For more information related to insurance in the state of Texas, please click here.
Provide coverage, avoid repossession.
The borrower, upon signing of the lending agreement when the collateral was purchased, will be deemed in loan default unless proof of acceptable insurance coverage is provided. First Basin Credit Union Policy states if the borrower fails to provide acceptable coverage for a period up to 60 days, the collateral will be repossessed. In order to avoid repossession, simply find an insurance policy that meets our accepted standards as listed above, click the UPDATE MY INSURANCE NOW link and complete the necessary steps for providing proof of coverage. This simple online form can be filled out, signed and sent to the correct department with a few clicks.
Should you have any questions related to CPI or related insurance, please give us a call at 432-333-5600 or 888-297-3416. If you’d rather email, you can email email@example.com and we’ll be happy to assist you in locating acceptable coverage options.