Mitigating Wind and Hail Exposure: RAC and CRM's Dealer-Owned Asset Program
Ross Automotive Consultants (RAC) has partnered with Captive Risk Management (CRM) to introduce a program designed to help dealerships manage wind and hail exposure. This program allows dealers to create a segregated, dealer-owned asset to cover deductible costs related to catastrophic weather events. With severe storms causing significant insured losses in recent years, this program offers a solution for dealerships facing high deductible obligations due to hail damage and other weather-related issues.
The partnership between RAC and CRM enables dealers to establish an IRS-compliant cell within their reinsurance position to fund deductible costs for inventory, paintless dent repair (PDR), and business interruption claims. Premiums are validated by third-party pricing, and unused funds accumulate over time, providing a strategic asset for dealers. This program aims to help dealers take control of their risk exposure and build equity from it, rather than treating deductible costs as a sunk expense.
The coverage provided through the captive program includes protection against wind, hail, hurricane, and tornado damage to new and used inventory, deductible reimbursement for insured losses, PDR costs, monetary shortfalls between insurance settlements and repair costs, and business interruption due to weather events. Given the weather-exposed nature of auto retail inventories, this program offers a tailored solution to help dealerships manage their risk effectively.
The program is now available to both franchise and independent dealerships nationwide. RAC is offering a complimentary feasibility analysis to help dealer principals assess whether this structure is suitable for their operation. By partnering with Captive Risk Management, RAC aims to provide a proven, dealer-specific solution to address the unique risk exposures faced by auto dealers.
For dealers interested in exploring this program further, they can contact Ross Automotive Consultants or Captive Risk Management to request a feasibility analysis. This analysis includes an independent risk assessment, customized design, and implementation roadmap to help dealers determine the suitability of this program for their dealership. With the increasing frequency of severe weather events impacting auto dealers, this program offers a proactive approach to managing risk and building equity.
In conclusion, the partnership between Ross Automotive Consultants and Captive Risk Management offers a comprehensive solution for dealerships looking to mitigate wind and hail exposure. By creating a segregated, dealer-owned asset to cover deductible costs, dealers can protect their inventory and bottom line from the financial impact of severe weather events. This program provides a strategic way for dealers to manage risk, build equity, and safeguard their operations against weather-related challenges.