Reserves & Underwriting

Question 1

What system do we have in place to pay for damages to our vehicles

Answer 1

The reserves. This is money set aside to pay for damages to a vehicle that is damaged while it is on rent

Question 2

What is the account number and when is it used?

Answer 2

3452. It is charged when we pay for losses originating from damage while a car is on rent.

Question 3

What hits your reserves?

Answer 3

1. CDW losses hit reserves that month
2. Subrogatable claims billed out that were not collected after 90 days
3. Current files that RM writes off
4. Losses that we cannot collect for
   a. branch does not confront about damage
   b. delays in getting a car shopped
   c. branch eats damage for customer service

Question 4

How are the reserves calculated

Answer 4

12 month rolling average + a 10% buffer

Question 5

If you spend more than your reserves, do they increase or decrease?

Answer 5

They increase

Question 6

If you spend less than your reserves, do they increase or decrease?

Answer 6

They decrease

Question 7

Are CDW sales an indirect or direct correlation to the reserves?

Answer 7

Indirect. Although DW losses hit your reserves, there is no guarantee that ONLY DW customers will damage cars

Question 8

What is LPC?

Answer 8

Loss Per Car

Question 9

What tool is used to review your branch’s loss history and trends?

Answer 9

The Daily Rental Physical Damage Summary

Question 10

What is the key to the reserves system?

Answer 10

Consistency which can be obtained by proper underwriting

Question 11

What is the easiest way to have a positive impact on your reserves?

Answer 11

Good Underwriting

Question 12

What should be in every contract to ensure proper underwriting?

Answer 12

1. Current address
2. Employer
3. 2 phone numbers
4. Insurance information (whenever possible)

Question 13

What are extra precautions we need to take on cash/debit rentals?

Answer 13

Qualification tab:

• current pay stub
• utility bill
• 3 references
• lives locally (branch’s discretion)

Question 14

What are the main guidelines to keep in mind when ensuring good underwriting?

Answer 14

1. Does the rental make good business sense?
2. If I want the car back, will I know where to find it?
3. If it comes back damaged, how is it covered?

Question 15

What are the deposit requirements for cash and debit?

Answer 15

1. No cash over $50

2. Debit and money orders: Prepayment + $100