Vendors Single Interest (VSI) insurance is a type of insurance that protects the lenders interest in the event that the vehicle or other collateral is damaged or destroyed. VSI insurance is structured to protect the interests of the lender but not the borrower of home, auto, or other consumer loans. VSI is a blanket insurance policy that allows lenders to easily protect their entire collateralized loan portfolio. VSI insurance covers only the banks risk in the event of a default. Contracts dated on or after 06/25/07 must contain the VSI disclosure. VSI is a single interest insurance that benefits only the lender, and only after collateral is repossessed.