A method for managing collateral or property risk in a secured loan or lease portfolio includes monitoring the insurance status of each individual loan or lease. If insurance is not maintained as agreed by the borrower or lessee, a loan default or property protection fee is added to the loan or lease. The loan default or property protection fee is not allocated to an insurance premium but is used by the lender or lessor to offset expenses related to collateral or lease property damage. Optionally, the default provisions of the lending or lease agreement may be invoked if a maximum threshold level is reached while assessing the loan default or property protection fee. A system for implementing a method includes a loan or lease database and an insurance database. A data processor communicates with each database to determine whether the loan default or property protection fee is assessed.