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Contingent Physical Damage protects
the lessor or lending institution in the event that the lessee’s
primary physical damage insurance is cancelled or is inadequate
to cover the lessor’s loss. CPD is available for both equipment
and automobiles.
Market
Mid to large size Commercial Lessors and Commercial Lending institutions.
Structure
The lessor requires insurance protection as part of the lease contract.
The lessor may or may not have an insurance tracking system in place.
If at the time of loss, the lessee is either uninsured or underinsured
the lessor will have protection from financial loss due to damage
or theft of its leased equipment.
Features
- Provides
physical damage insurance only; does not provide liability coverage
- Coverage
limits are the least of the cost of repair, actual cash value,
and the net payoff of the lease
- If
the equipment value is greater than the lease balance and the
equipment is a total loss, CPD covers the net payoff of the lease
- Coverage
is “single interest,” meaning only the lessor may file a claim.
Payment default and repossession are conditions for a covered
loss and CPD is excess of all other insurance available.
- Coverage
is generally written on a monthly reporting form or for an annual
period
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