Collateral Protection Insurance

Per your Loan and Security Agreement and the Supplemental Insurance Agreement you must keep Full Coverage Insurance on your vehicle until the loan is paid off in full. If full coverage insurance is not kept on the collateral during the term of your loan, Collateral Protection Insurance (CPI) will be added. 

CPI is a type of insurance added to a borrower's loan by the lender when the borrower fails to maintain the required Full Coverage Insurance on their vehicle, as stipulated in the Loan and Security Agreement and the Supplemental Insurance Agreement. Unlike standard auto insurance, CPI does not provide protection for the vehicle itself but solely covers the remaining balance of the loan. This means that while CPI ensures the lender’s financial interest is protected, it does not fulfill the requirements for vehicle liability insurance required by New Mexico state law. The addition of CPI to a loan results in an increased loan balance due to the added insurance premium and interest, consequently raising the borrower’s monthly payment amount.

*The result of having CPI (Collateral Protection Insurance), added to your loan, is as follows: the premium for the insurance, plus interest, will be added to the balance of your loan, and therefore, increase your monthly payment amount. Please be advised that this change will go into effect starting March 3, 2025. 

To avoid CPI premiums being added, you will need to provide your own, Full Coverage Insurance to LOCO Credit Union.

The minimum required insurance coverage is listed below:

  • LOCO Credit Union as Lienholder

  • Deductible of $500.00 OR less, for both Comprehensive and Collision coverages.

If you have insurance currently, but have received communications from the credit union, please contact us as soon as possible, as there may be a listed requirement that is missing from your policy, in which, CPI is or will be added.

To update your insurance information, please feel free to visit www.LOCOCreditUnion.com. Click on the Digital Services tab, go to Insurance Status, you will be asked to continue to a new window, click Continue, and you can upload your insurance policy with the step-by-step instructions on the website. You may also email your insurance policy to: lococu@imcovered.com.

If you should have any questions, please feel free to contact us.