Residual Value Insurance (RVI) provides coverage when the market value of a leased vehicle (or collateral for a balloon note) is less than originally contracted at lease origination. Unfortunately, most traditional RVI programs do not meet the unique needs of today’s lessor. When structured on first dollar coverage, premiums are high and conflicts are inevitable. When structured on an aggregate deductible basis, premium reductions do not justify increased exposure to the lessor, and true catastrophic coverage is not provided.

The Tri-Arc Residual Value Insurance Program was structured to satisfy the risk transfer needs of the sophisticated Lessor. Our program utilizes an aggregate approach allowing overvalue vehicles to offset undervalue vehicles. By aggregating various makes and models, and using a dependable benchmark for insurance values (ALG), we have a program which is very appealing to a Lessor. Knowing that risk retention and risk transfer requirements vary from Lessor to Lessor, we have developed a residual value structure which is flexible enough to adapt to your specific needs.

For the Lessor who is conservative with their enrollment residual values and has a well defined remarketing program, our portfolio aggregation program provides FASB compliance plus true catastrophic coverage at a very low premium rate. The utilization of deductibles can further drive down premium costs.

For the lessor who chooses to transfer additional risk, our program structure can accommodate different levels of risk at premium rates lower than what is typically charged within the industry.

• True risk transfer;

• Catastrophic coverage in the event wholesale value's drop;

• Accounting accommodations to meet FASB 13 regulations;

• Easy enrollment and termination provisions;

• Very competitive premium;

• An ability to further significantly reduce premium by "bundling" coverages
  such as Contingent & Excess Liability with residual value;

• A loss reserve, funded with pretax dollars, providing the Lessor an opportunity for refund;

• Insures aggregate residual value on your entire portfolio;

• Ability to include RVI, Contingent/Excess and GAP in one program; and

• Improves yields on asset securitization