Collateral Protection Insurance (CPI) insures property held as collateral for loans made by lending institutions. CPI is classified as single-interest insurance if it protects the interest of the lender only. If it protects the interest of both the lender and the borrower, it is referred to as dual-interest insurance.
Upon signing a loan agreement, the borrower typically agrees to purchase and maintain insurance that lists the lending institution as the lienholder on the property/collateral. If the borrower fails to purchase such coverage, the lender is left vulnerable to losses.