Questions to ask about dealer reinsurance.

Questions about the structure itself.

The structure decides how much you own, how much you control, and how you are taxed. It should follow your goals, not the other way around.

• Which structure are you recommending, and why that one for my dealership specifically?
• What do I actually own, and how much control do I have over it?
• Is this offshore or domestic, and what does that mean for me?
• What capital, if any, do I need to commit, and when?
• How does this structure handle growth if my volume increases?
• What would it take to change or unwind this structure later?

See every structure compared side by side.

Questions about fees and transparency.

Fees quietly decide how much of the underwriting profit actually reaches you. The ones that matter are often the ones that are hardest to find on a statement.

• What are every fee and cost in this program, listed in full?
• What is the ceding fee, and how is it calculated?
• What administration, expense, and management fees apply, and to what?
• What does my monthly statement show me, and what does it leave out?
• How do I see net premium after all fees, not just gross?
• Are there costs that only appear at renewal, distribution, or exit?

Read how to review fees and net premium.

Questions about the administrator and claims.

Underwriting profit is what claims leave behind. The administrator and the claims experience often matter more than a few points of rate.

• Who is the administrator, and what is their claims reputation?
• How are claims adjudicated and paid, and how quickly?
• What has the loss ratio looked like on books like mine?
• How are reserves set, held, and reported?
• What reporting will I get, how often, and in what detail?
• What happens to reserves and claims if I ever change providers?

Questions about products and performance.

Product mix drives claims, reserves, and results. The lines you include should be chosen deliberately, not by default.

• Which products feed this structure, and why those?
• How does each product line tend to perform inside a reinsurance program?
• How do penetration and pricing change my projected results?
• What is a realistic range of outcomes, not a best case number?
• How will we measure whether the program is performing over time?

See how product selection affects performance.

Questions about long term value and exit.

A reinsurance or warranty company can become a separate, transferable asset. That only helps you if it is built with the long term and succession in mind.

• How does this program build value I could eventually transfer or sell?
• How does it fit with succession, estate, or acquisition planning?
• How and when can I take distributions?
• What are the tax considerations, and who reviews them with me?
• What does the program look like in year one versus year five?

See how reinsurance connects to wealth and succession.

Questions to ask whoever is guiding you.

You are not just choosing a structure. You are choosing who helps you run it. An advisor should be comfortable being compared and questioned.

• Are you showing me every structure, or only the one you sell?
• Will you model this on my real production, or a template?
• How are you compensated, and does that influence the recommendation?
• Will you review a program I already have, honestly, even if you did not set it up?
• Who coordinates with my tax, legal, and accounting professionals?

What answers should make a dealer pause?

None of these is proof of a bad program on its own, but each is a reason to ask more before you move forward:

• A single structure is pushed before anyone has looked at your numbers.
• Fees are described as "standard" without being itemized.
• Statements show gross premium but never a clear net after fees.
• Claims and loss ratio history are hard to get a straight answer on.
• Projections are shown only as a best case, with no downside range.
• You are discouraged from having your own tax or legal advisor review it.

If you want a second set of eyes on the answers you are getting, that is exactly the kind of conversation we are glad to have. Start with a transparency review or compare your options with the comparison tool.

Frequently asked questions.