Auto loan contracts often require the driver to maintain insurance. That doesn't always happen. That's where Balboa Insurance Group comes in.
The Irvine, Calif., company occupies a niche in the F&I world. The company is hired by lenders -- often subprime lenders -- to keep track of whether drivers with outstanding loans keep their auto insurance current and to place insurance on vehicles if their drivers won't.
This is a practice often called forced-place insurance, since the driver is billed for the coverage. The polite term is lender-placed.
Balboa also specializes in insurance to protect auto lenders against the cost of damage to cars that are repossessed.
Although not widely known -- the Balboa booth was virtually deserted during the American Financial Services Association Vehicle Finance Conference & Exposition in Orlando in February -- Balboa monitors more than 24 million auto loans and mortgages on behalf of lenders nationwide, says Mark McElroy, president of Balboa's financial institutions division.
Balboa is a unit of Bank of America.The banking giant acquired Balboa along with its parent, mortgage lender Countrywide Financial Corp., in July 2008.
Automotive News Special Correspondent Jim Henry interviewed McElroy recently.