Blanket Lenders Single Interest Insurance (LSI), sometimes called Blanket Vendor Single Interest (VSI) is an insurance product that has proven its value-proposition to automobile financers since 1972. The benefit to the lender is the reduction of net charge-offs because the lender is reimbursed for physical damage when a delinquent account's collateral is repossessed with uninsured physical damage or the collateral is an unrecoverable (skip).

Every borrower in the portfolio is charged a small premium at loan origination, and this premium is used to cover losses incurred when a delinquent account is repossessed. Since in most states, the lender is able to pass the premium cost to the borrower, the result is an immediate benefit to the portfolio's bottom line via a substantial reduction in net charge-offs.

Lenders Single Interest insurance protects the financial institution from damage or loss that can occur before or after repossession and while the financial institution holds the property in its possession. This coverage can also protect the institution if its interest is not perfected due to an error or omission. Covered loans include personal or consumer loans made for automobiles, watercraft, recreational vehicles, mobile homes and aircraft.