Golden Eagle Insurance launched a new product last week designed to aid lenders and customers during unexpected life events.
The negative-equity protection program is described as GAP insurance for life events, allowing customers to walk away from their auto loans or skip payments in the case of unexpected life events, including involuntary unemployment, physical injury or a permanent change of station for military personnel. For lenders, the product could generate revenue and may result in reduced delinquencies or charge-offs, Golden Eagle Marketing Manager Christine Hannigan explained.
“If they can’t pay because they had a life event, they don’t have to worry about paying back the loan they can no longer pay,” Hannigan said. If a borrower decides to turn in the vehicle, Insurian, the insurance provider, will line up a dealer to purchase the vehicle. The product can be offered on both direct and indirect loans and is priced similarly to GAP insurance.
Columbus, Ohio-based Golden Eagle works with about 350 auto lenders across 30 states with the focus to expand its presence in California, Colorado and Wyoming this year. Already, “a handful” of organizations have signed on to offer the product. The program, called Life Event Auto-loan Protection, or LEAP for short, was based on Hyundai’s Assurance insurance policy, Hannigan said.
LEAP covers seven unexpected life events. In addition to the examples listed above, other qualifying events include international employment transfer, self-employed personal bankruptcy, loss of driver license due to injury or illness, and accidental death.
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