What is automated insurance tracking?

Lenders regularly need to monitor the insurance coverage that borrowers maintain on financed properties and equipment. Automated insurance tracking can make this easy.

Automated insurance tracking simplifies the process of monitoring borrowers’ insurance coverages. Using software reduces errors, minimizes risk, and lessens the likelihood of fines.

Which lenders should be using automated insurance tracking?

Most lenders underwriting collateralized loans should implement an automated insurance tracking solution. This is an efficient way to make sure required coverages are in place on financed assets. 

Automated tracking might be used by banks, credit unions, specialized lenders, or other financial institutions underwriting loans.

insurance tracking simplifies the process of monitoring borrowers’ insurance coverages. Using software reduces errors, minimizes risk, and lessens the likelihood of fines.

Automated Insurance Tracking California

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What types of insurance is automated tracking available for?

Automated tracking is available for most of the different insurance coverages that lenders (or others) require. For instance, tracking may be set up for:

  • Property Insurance Requirements: For residential mortgages, HELOCs, commercial property loans, mezzanine financing, and other real estate loans with mandated coverages.
  • Vehicle Insurance Requirements: For personal vehicles, commercial vehicles, and fleets when comprehensive coverage, collision coverage, and gap coverage are mandated.
  • Specialized Perils Requirements: For flood insurance, earthquake insurance, or hurricane insurance when financed properties are in high-risk areas.
  • Landlord Insurance Requirements: For mandated rent guarantee coverage, loss rents coverage, and business income coverage when investment properties are financed.
  • SBA Insurance Requirements: For mandated coverages when businesses take out SBA 504, SBA 7(a), or other SBA loans.
  • Specific Industry Requirements: For situations where liquor liability insurance, crop insurance, or other industry-specific insurance coverages are mandated.
  • Workers Compensation Requirements: For state-mandated workers compensation coverage.

In addition to these, lenders might automate the tracking of lenders loss payable coverage, personal property coverage, general liability coverage, or others. Almost any insurance coverage that lenders or regulators require can be tracked with an automated system.

What are the benefits of using an automated lender insurance tracking system?

Using an automated tracking system can have multiple benefits for lenders. A few highlights are:

  • Reduced Labor Costs: Eliminating the need for manual tracking can save employees a significant amount of time, and the associated labor cost savings can be quite substantial.
  • More Accurate Information: Automated systems aren’t prone to the same errors that people might make when manually tracking. Lenders also receive more timely information if a borrower lets coverage lapse.
  • Better Regulatory Compliance: More accurate and timely information allows lenders to take action more quickly when necessary. This may improve regulatory compliance, and reduce the likelihood of insurance-related fines.
  • Reduced Risk of Loss: Quickly instituting force-placed coverage when necessary also reduces the risk of collateral being destroyed when not protected.

Regulatory requirements make it particularly important for lenders to use a lender-specific automated tracking system. Requirements can vary by state, loan type, financed collateral, and industry. A system that’s specifically for lenders will be designed so that different regulatory requirements can easily be set up.

Automated Insurance Tracking California

Do automated tracking systems also automate force-placed coverage?

Automated tracking systems, themselves, usually aren’t set up to immediately force-place coverage without further oversight. Instead, they’re more likely to promptly notify lenders of coverage breaches. Lenders can then take any action that’s appropriate, potentially issuing force-placed coverage. 

While the software itself usually won’t institute force-placed coverage, it’s easy to combine the software with additional services. Those additional services can often include instituting force-placed coverage when necessary.

Where can lenders get help with automated insurance tracking?

If you need an automated insurance tracking solution that’s specifically designed for lenders, get in touch with us at QuieTrack. Our proprietary system can provide automated tracking alone, or be combined with other services for a comprehensive solution to lender insurance requirements. Reach out today, and one of our team members will help you explore how our system could help you.

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