Lender-Placed Insurance
When a borrower’s insurance lapses, your institution’s risk increases - fast. TEJ Agency provides lender-placed insurance coverage that activates when borrower policies are canceled, insufficient, or non-existent. From hazard and flood to REO and auto coverage, our solutions help financial institutions stay protected, compliant, and in control of every loan.
Flexible Coverage Options That Fit Your Portfolio
We customize every lender-placed insurance program to suit the types of loans you manage and the risks you want to mitigate.
Hazard and Fire Insurance
Designed for residential and commercial properties, this coverage steps in when a borrower’s hazard or fire policy is canceled or inadequate. It ensures the physical asset remains insured so your financial interest is protected.
Flood Insurance (NFIP-compliant)
Required in designated flood zones, flood coverage must meet federal and investor standards. We provide compliant flood insurance for any property where a lapse has occurred or the borrower’s coverage doesn’t meet guidelines.
Windstorm and Named Peril Coverage
For institutions operating in coastal or storm-prone areas, we offer specialized coverage for wind, hail, hurricanes, and other specific risks that may not be included in standard hazard policies.
REO (Real Estate Owned) Insurance
Once a property is repossessed or foreclosed, it becomes your asset. REO insurance protects that property from damage, vandalism, or liability while it’s in your possession.
Collateral Protection Insurance (CPI)
When insurance on titled collateral like autos or equipment is missing, CPI provides immediate protection for physical damage and loss. This is ideal for auto lenders and equipment finance institutions.
Why Lender-Placed Insurance Is Critical for Financial Institutions
Protects Your Collateral When Borrower Coverage Fails
Lender-placed insurance keeps your portfolio secure, even when borrower policies are canceled or never obtained.
Ensures Compliance with Lending Regulations
Many loans require specific types of coverage. We help you stay compliant with flood, hazard, and investor requirements.
Reduces Administrative Burden and Response Time
Our streamlined process reduces friction for your team while ensuring fast, compliant policy activation when it’s needed most.
Frequently Asked Questions
When should a lender-placed policy be used?
Lender-placed insurance should be used when a borrower fails to maintain the insurance coverage required by the terms of their loan. This could include cancellations, expired policies, insufficient limits, or missing endorsements. Once a lapse or deficiency is confirmed, TEJ can activate coverage immediately to ensure the lender’s interest is protected. This type of coverage is a safety net that helps avoid uninsured risk while maintaining compliance.
What types of collateral can be covered under lender-placed insurance?
Lender-placed coverage is available for a wide range of collateral types, including residential and commercial real estate, condominiums, vehicles, and titled equipment. Our programs are built to accommodate different loan portfolios, whether you’re managing home mortgages, auto loans, or business equipment financing. Each policy is tailored to the asset type and risk exposure, ensuring your institution has appropriate protection for every scenario. If needed, we can include perils like fire, flood, wind, or theft depending on your region and asset class.
How does lender-placed insurance interact with borrower notices and compliance?
We handle all borrower notifications in accordance with regulatory standards. This includes timely pre-placement notices, lapse alerts, and confirmations when coverage is placed or canceled. Communication can be sent by mail and supplemented with digital options like email or SMS. These notices serve both a compliance and customer service function—informing the borrower while protecting your institution from legal and reputational risk.
What happens if the borrower reinstates their own coverage?
If the borrower provides proof of valid coverage after a lender-placed policy is issued, we cancel the policy—often backdating it to match the reinstatement date. This ensures your borrower isn’t charged for unnecessary coverage and helps maintain transparency. We work quickly to reconcile records and notify your team, so your servicing operations stay aligned.
Can we customize the types of coverage and limits in our program?
Yes, TEJ customizes every lender-placed insurance program based on your institution’s needs, risk appetite, and regulatory environment. You can select from different coverage types, deductible levels, carriers, and administrative processes. We’ll work with you to create a program that’s both protective and efficient—while also integrating with services like Insurance Tracking and Blanket Insurance Programs if desired.
