Total Loss Protection: The ABCs of TLP

Superior F&I products are those that offer clear benefits and valuable coverage that will, in the event of a claim, provide customers with a positive experience that builds their allegiance to their selling dealer. Total Loss Protection from DOWC is just such a product. Let’s take a closer look into how it works and the ways it can benefit both customers and dealers.

What is Total Loss Protection (TLP)?

A vehicle that suffers significant damage in an accident (resulting in repair costs being more than the vehicle’s actual cash value), or is stolen and unable to be recovered, may be deemed a total loss by the owner’s insurance company.

Total Loss Protection coverage helps relieve the burden of replacing a vehicle deemed a total loss because of accident or theft by providing a credit to the customer toward the purchase or lease of a replacement vehicle from the selling dealer.

How TLP is Different from GAP

Both Guaranteed Asset Protection (GAP) and Total Loss Protection (TLP) are coverages that come into play in the event of a total loss resulting from an accident or theft. The difference lies in the type of financial benefit provided.

A GAP waiver covers a portion of the difference between the insured value of a vehicle and the balance of the loan or lease that the owner must repay. In essence, it pays off any amount still due after insurance settlement on the matter.

TLP, on the other hand, provides financial relief toward the cost of a replacement vehicle. Coverage takes the form of a credit to the owner, up to the coverage maximum benefit, toward a vehicle purchase or lease from the selling dealer.

The Protective Element of Our TLP Product

What sets DOWC’s Total Loss Protection apart is the inclusion of a protective product designed to deter theft or aid in stolen vehicle recovery. Options include:

  • UV Body Panel Labels that leave a permanent and unique code on the vehicle that is visible under UV light, deterring theft and allowing law enforcement agencies to identify the owner of a recovered vehicle.
  • GPS Tracking Devices that can be installed (some using the OBDII on-board diagnostic port) and that transmit a vehicle’s location using GPS satellites, allowing immediate location tracking, and aiding in recovery.

In the event that the installed theft protection product fails to prevent the theft of the vehicle, and it is not recovered and thus deemed a total loss, TLP’s financial benefit is triggered.

Valuable Benefits for Customers & Dealers

For dealers offering DOWC’s Total Loss Protection product, the value is two-fold: revenue generated throughout the term of each contract as well as the direct tie-back for vehicle replacement per the terms of the agreement.

For customers, added theft protection brings peace of mind from day one of ownership. And in the event of a total loss, the financial benefit helps protect their budget and get them back on the road in a vehicle acquired from their trusted selling dealer.

To learn more about Total Loss Protection, and the full line of DOWC F&I products, as well as participation options, contact us today.

This is How We Do Business

When it comes to starting a new relationship with an F&I service provider and administrator, the last thing dealers are likely to think about is how it might end. But there are important things to know about the final farewell before saying “I do” to a new financial partner.

The shocking reality of how dealers can be mistreated by a “trusted” partner recently came to light through this actual message we received from a dealer who was in the process of retiring. 

Here are the facts:  

  • Manufacturer finance groups are gouging their dealers at termination, even lifelong partners who are expected to retire with maximum return on their years of investment and hard work.
  • As shown in this example alone, one premium OEM service provider dealt an incredible blow to this dealer with a stunning 12% cession fee and 2.5% premium tax rate.  
  • Add to that a potential collateral increase as well as loss adjustment expense (LAE) and the aggregate loss is staggering. 
  • This specific dealer is facing a loss of $120,000 per $1 million as a result of the terms imposed here.

DOWC offers an alternative: a better, fairer, and much more lucrative alternative every dealer should be made aware of. At the outset, we set dealers up correctly with a transparent fee structure that ends as it begins.  


OEM F&I Services: 

  • Variable cession fee (in this example, an astronomical 12%) on runoff premium
  • Zero, or limited, access to unearned premium through the life of relationship 
  • Standard 2.5% premium tax  


  • 0% cession fee on runoff premium
  • Expanded access to wealth through various participation structures 
  • State-specific premium tax

To maximize success, we leverage each dealer’s state-specific tax rate instead of taking a one-size-fits-all approach, often resulting in less tax and fewer fees. 

Throughout the life of the partnership, DOWC’s terms remain transparent: 

  • Your admin fees do not change 
  • Your insurance fees do not change 
  • You are charged no loss adjustment expense (LAE) per claim or at termination 
  • The increase to the amount of collateral is kept to 125% at termination (vs. upwards of 150% others may require 
  • You are charged no cession fees  

Our goal is provide expanded and ongoing access to wealth rather than limit it, and certainly not to chip away at it further upon termination.

Even when the relationship reaches its conclusion, for whatever reason, we charge no additional fees and walk away as friends.  

Dealers must protect themselves from being victimized by their OEM finance group. The DOWC model is low-commitment and low-obligation. Our agreement allows for a 30-day notice to cancel – resulting in zero consequences and zero ceding fees. Given the financial impacts illustrated above, these are critical points to consider in choosing the right F&I partner.  

Contact us today to learn more about how DOWC does it differently. 

PaymentShield™: Financial Protection When Customers Need It Most

Job loss can happen without warning and often result in immediate impacts on customers’ personal or household finances. Car loan or lease payments could quickly become a source of financial strain without regular income. But losing access to one’s vehicle would present an entirely new set of unwelcome challenges.

Helping your customers protect their investment and ability to keep their vehicle when difficult circumstances arise is crucial. That’s where DOWC’s PaymentShield program comes in.

In the unfortunate event that a customer loses their job due to covered circumstances, including pandemics, PaymentShield provides reimbursement of loan or lease payments for up to six months.*

PaymentShield is available for new vehicles that are leased or purchased, as well as for loans on used cars.


PaymentShield is a benefit provided by the selling dealer.  

When a vehicle is purchased or leased, the customer is automatically made eligible for a predetermined maximum total PaymentShield benefit set by the selling dealer. 

For example, a maximum total benefit of $5,000 would allow: 

For a base vehicle payment set at $799/month, a monthly reimbursement for the entire payment could be issued for up to 6 months ($799 x 6 = $4,794). 

For a payment amount of $899/month, a monthly reimbursement for the entire payment could be issued for up to 5 months, with $505 applied toward a 6th month’s payment ($899 x 5 = $4,495 + $505 = $5,000). 

For a payment amount of $999/month, reimbursement could be issued for the entire payment for up to 5 months ($999 x 5 = $4,995). 

Note that the customer must be current on payments and provide proof of payment(s) made to be eligible for reimbursement. Some additional restrictions will apply, and proof of employment at the time of the vehicle lease/purchase, as well as proof of job loss, are required.

The key to resilience is the ability to overcome adversity. Working with your valued customers to put protection in place today is a smart way to help them safeguard against unexpected challenges that may arise tomorrow.

PaymentShield offers financial relief … and cash in hand … when it is needed most.


* Reimbursement is subject to maximum benefit and other terms and conditions of the contract. Reimbursement amount does not include finance charges, late charges, delinquent payments, deferred payments, uncollected service charges, refundable prepaid taxes and fees, and/or penalty fees owed by the customer on the date of employment loss.

Wealth Is Not About Having Money, It’s About Having Options


DOWC specializes in programs and structures that are focused on making cash accessible to dealers: not in a few years, but when they actually need it – NOW.

With impacts like the pandemic shutdown and chip shortages, would access to cash make a significant difference to your business?

The key to resilience is the ability to overcome adversity. Access to cash – your cash – gives you the flexibility to invest and deploy your resources as you see fit: to retain talent, to expand, to drive more return.

DOWC takes your wealth seriously. Let’s talk about your business and keeping it healthy with cash flow and careful compliance.

Learn more and reach out for your personalized consultation today.

DOWC Benefits Our Dealers by Providing Excellent Digital Resources

DOWC’s reliable tech and tools provide customers the information they seek and dealers the resources to sell with ease.
The result? F&I wins, increased profit, satisfied consumers.

Marketing Support
  • Sharply designed digital marketing materials & video content that can be passed seamlessly through to preferred menu systems and e-commerce platforms.
  • The DOWC online supply store, a self-service resource that provides easy access to product collateral and supply reorders.
Dealer Resources
  • Smart, transparent, always-on reporting.
  • Convenient web portal for up-to-the-minute news, updates, and instant access to contracts and agreements.
Engagement Tools
  • Our custom-built technology tools to better manage customer interactions, provide support, and maintain relationships.
  • Producer Information Portal designed for intuitive management of deals in progress as well as creating new deals.

Two Outstanding F&I Brands, One Road to Dealership Success

DOWC and Offer Tailored Solutions for Every Dealer

For dealerships of every size, F&I can be a key source of growth. But not every dealership needs the same solutions.

As part of a family of companies that directly provide and administer innovative protection products, DOWC and offer comprehensive dealer and customer services, including varied participation options, critical compliance expertise, and a tech-forward approach to claims administration and always-on reporting. We have the solution for your every need.

service contract
Top-Notch Customer Experience

Together, DOWC and are fully dedicated to customer satisfaction by offering world-class coverage options, competitive pricing and flexible payment terms, efficient claims processing, and an extensive national network of repair facilities to get vehicles back on the road without delay.

We proudly maintain an A+ Better Business Bureau (BBB) rating and have successfully processed tens of millions of dollars in claims, creating thousands of extremely satisfied customers and positive associations with selling dealerships.

Superior Dealership Options 

Dealer groups, franchise dealers, and independent dealers of all sizes each have unique needs. Our family of brands is structured to provide streamlined, lucrative solutions to support every dealership type and every dealer’s business preferences. 

We provide the tools to successfully market to customers across every financial range. We offer multiple participation options, including the option not to participate. We exist to pay claims and create satisfied customers who tie back to your dealership for service and repeat business. Our technology is a game-changer for managing your F&I and dramatically improving your bottom line. 

Lucrative Agent Opportunities 

Agents know their dealers best. With two stellar brand options, we are providing the full spectrum of opportunities for signing and retaining business. We have simplified onboarding, amplified our outstanding online and consumer ratings, and are constantly innovating new products and services to give our agents a powerful arsenal of competitive options that bring lucrative commissions and satisfied dealers who will stay and grow with us. 

Understanding what a DOWC is, and how it functions, may be a direct route to maximizing profit for your dealership.

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You’ve likely seen the term DOWC, but you may not be entirely sure what it means. Here’s an overview you won’t want to miss because understanding what a DOWC is, and how it functions, may be a direct route to maximizing profit for your dealership — a critical consideration as unprecedented challenges continue to hit the industry from all sides. 

What is a DOWC? 

A dealer-owned warranty company (DOWC) is a unique structure that brings the tax advantages of the insurance industry to automotive F&I, creating a true wealth-building opportunity. By successfully establishing their own DOWC, dealers gain significant tax benefits and additional advantages that help optimize their F&I program. 

Under a DOWC structure, a dealer forms a separate C-corporation that controls the entire service contract transaction and all funds, including investments. This new entity becomes the provider of the contracts, providing an alternative to using a third party to hold reserves, and is treated as an insurance company for tax purposes. 

While it may seem a complicated endeavor, its benefits can be outlined in simple terms. Consider these key benefits:

  • The tax-deferred nature of a DOWC allows the dealer to take advantage of the same tax laws that insurance companies have been operating under for decades.
  • Essentially, the company has no taxable income for an extended period of time as a result of numerous expenses: administration and acquisition costs in the current tax year; net operating losses are carried forward.
  • With the correct administration, a DOWC formation is actually very easy to manage and, most importantly, prosper from.
Why a DOWC? 

Under a traditional service contract transaction model, a significant portion of the funds is held by a third party that controls them to its own benefit.

The DOWC structure proves there’s a better way:

  • When a DOWC serves as the provider, the dealer immediately has 100% control over their F&I program, including rates, coverages, marketing materials and the company name. In addition to increasing profit potential on F&I sales, the ability to customize their offerings means a dealer can build a portfolio of products that caters to a variety of vehicles and consumer needs.
  • Underwriting profits and investment income are retained solely by the dealer’s DOWC. Compare this to other structures where premiums may be exempt from tax, but investment income returns are taxed at normal corporate rates. 
  • A DOWC is not the same as an NCFC or CFC — it is not a foreign company at all. The structure allows dealers to stay onshore and benefit from domestic formation, as opposed to having to maintain foreign companies and being forced to invest with money managers preferred by an administrator. This can provide significant cash flow and a dealer can also borrow for virtually any purpose. 
Why a DOWC? The Better Question May Be, Why Not? 

It’s easy to understand why making the switch can seem intimidating. Some dealers may not understand what a DOWC is or how it functions. Or they may find it scary to shift gears after years in a more traditional reinsurance structure or limited participation with a guaranteed retro setup. But the time is now to explore the advantages and opportunities for wealth-enhancement that are readily available to all. 

Guidance for F&I Agent Success

New year, new you! We’ve all heard that before – but as ever-changing and ever-increasing challenges continue to hit the automotive industry, it is critical that every agent take a good look in the mirror and ask yourself, “Am I prepared?”

  • Prepared for the evolution of the industry as it shifts irrevocably away from internal combustion engines and brick-and-mortar dealerships?
  • Prepared for the evolution of F&I participation structures and products?
  • Prepared to become a subject matter expert able to bring solutions to dealers to retain and increase their business?

If the answer is not an absolutely solid yes to all these questions, you have some work to do. The key thing to address is your knowledge base. You’re busy, of course. We all are. Here’s an action plan you can start to implement today – and put yourself on the road to increased expertise, incomparable value as a dealer services consultant, and an earning curve that will keep going up year after year.

Ready, set, goal: Make an appointment with yourself to set concrete, measurable goals for 2022.

  • Write them in a notebook, draft a note on your phone, type up a Word document. However you choose to record your thoughts, it is critical to put pen to paper and get some solid ideas down. These will become your north star as the year progresses and challenges come at you from every angle.

Get smart: Feed your brain with new information every single day.

  • Set a daily reminder on your phone to stop, drop, and spend 10-15 minutes catching up on industry news. Read top headlines, stay current on automotive and finance & insurance trends, bookmark articles to explore more fully later, listen to podcasts or audiobooks while you’re driving to appointments. Strive to learn one new thing a day and put that knowledge in your arsenal to share with your clients.

Go pro: Professional development isn’t just for newbies.

  • Need to learn more about the different participation structures available to dealers? Need to improve your understanding of or get more up to date on tax compliance issues? There are plenty of resources available to you. Research trade associations, networking events, and online courses. Reach out directly to admins you trust and ask for guidance. Sharpening your subject matter expertise is a direct path to a win for everyone.

Be the change: This industry never stands still.

  • Dealers need solutions. If you’re not the one bringing them, someone else will step right in and do it for you. Start here: Identify your lowest-performing dealer and draft a few key recommendations to address their pain points. Strive to do this for every one of your clients eventually. The last thing you want is to have them hear about a winning solution from someone other than you.

Build resilience: It’s the most important muscle to develop.

  • If you’ve been in this industry for more than a year, you have already been through some incredible challenges. Did you just survive or did you thrive? Be ready to respond to any situation that arises with a flexible approach, a willingness to listen, the guts to take risks, and an attitude of gratitude every single day.

Shine online: Why waste the opportunity to connect with ease?

  • Amp up your social media presence by updating your LinkedIn profile, following industry thought leaders, expanding your network, and actively engaging with your connections. Not in the habit of posting regularly? Shoot for creating a new post, or at least sharing some content, once a week as a starting point. Demonstrating your smarts is never a waste of time.

Mirror success: There are incredible lessons to be learned from giants in every industry.

  • Too young to remember Jack Welch or Lee Iacocca? How about Steve Jobs? Or current disruptors like Bezos and Musk? Look back at the greats and keep current with today’s headline-makers. Read up on those who inspire you and pinpoint the lessons you can make actionable in your own work and life.

The key to unleashing your inner Super Agent is taking ownership of your success by putting in the work. Relying on surface knowledge, and repeating it back to others without a real understanding of what lies beneath, is a way to skate by that ultimately won’t get you to your real goals.

Once you become a true subject matter expert on service contract revenue opportunities, you can serve as much more than a dime-a-dozen sales agent. Instead, you can become a powerful wealth consultant to your dealer clients and help them successfully navigate the inevitable challenges that lie in wait for us all.


Michael LaMotta is CEO of DOWC®, among the fastest-growing service contract providers and administrators in the U.S. A 2021 Dealers’ Choice Diamond Award winner, DOWC offers customizable F&I products and expertise in compliance, as well as a full suite of technology designed to optimize productivity and expedite service contract claims adjustments, processing, and reporting. 

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Insurance regulators are turning their attention to service contracts and raising concerns about how they are regulated and whether these products should be categorized as insurance.

Recent changes in the political landscape have landed us in an era of increased scrutiny of the F&I industry.

Early concerns about the Consumer Financial Protection Bureau overstepping its regulatory authority are somewhat curbed at this point, but a new challenge is looming. Insurance regulators are turning their attention to service contracts and, once again, raising concerns about how they are regulated and whether consideration should be given to recategorizing these products as insurance.

The National Council of Insurance Legislators Property and Casualty committee convened this summer and explored the topic of service contracts. Understanding the general differences between warranties, service contracts and insurance was discussed, as was the size of the warranty market. A point was raised about the importance of claims and loss history, followed by a state representative’s remark that states should perhaps be collecting this data on service contracts.

General counsel and COO of DOWC, a service contract provider and administrator

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Inventory shortages are projected to continue through the end of the year as production schedules take the hit from ongoing computer chip scarcity. Dealers are all fighting the same battle now, forcing owners to continue to reassess their practices, streamline their operations, and retool their capabilities to find their way through. F&I claims management is one of the more important practices to examine, according to experts in claims administration.

“I was a dealer,” explains Michael LaMotta, CEO & Founder of DOWC®, a top U.S. service contract provider and administrator. “I know exactly what this process looks like from the inside out. But what I see now, from the other side, is very few dealers who truly play an active role in managing one of the largest expenses a reinsurance company or warranty company experiences: claims.”

Taking steps to improve that process is one of the most direct routes to profit growth a warranty company owner can take. “The single best way to manage profitability of any business is to control its expenses,” LaMotta says, “and car dealers are generally great at that. But in too many cases, dealers and their staff have no idea what is being approved on a day-to-day basis by their service contract administrators.”

One area where things may go wrong is the misuse of service contract benefits. It is not unusual, for example, for liberties to be taken with covered items by service writers who earn commission per service written. Dealers can take firmer control of the claims process and reduce costs by:

  • Minimizing the amount of fraud that may result from practices involving pay plans, commission structures, and objectives/goals set by service departments.
  • Controlling and limiting the number of unnecessary claims.
  • Training service departments to properly manage claims with the goal of reducing expenses (i.e., purchasing reconditioned wheels, rather than new, thereby a reducing the cost of a tire & wheel claim by 50% or more).

Another way to decrease expenses is by limiting “transient” claims – any repair that takes place outside the original selling dealership that issued the service contract. As LaMotta explains, “Allowing a transient claim is exactly the same as walking into your competitors’ offices and moving money from your pocket right into theirs.”

Dealers who take an active role in limiting transient claims benefit in several ways:

  • Keeping costs down by eliminating abuse.
  • In-house repairs performed at inherently lower rates than elsewhere.
  • Transferring money from left pocket to right instead of to the competitor: If a claim must be paid or a repair performed, the dealer wins by paying themselves to do it.

This all begs the question, what’s the true cost of a claim? The true cost of a repair (assuming the repair is performed in-house) is the flat rate paid to the technician and the actual cost of the part. Most dealers experience flat rate averages between $25 – $40 depending on the experience of the technician performing the repair. Most door rates for labor can fetch upwards of $200 or more in some metro areas. This puts labor profits in the 400 – 600% range. Parts markups are somewhere between 30 – 60% depending on the type of part. When the repair is performed outside of the selling dealer (transient), the true cost of the claim is whatever total amount was approved by the administrator.

A good question for dealers to ask themselves is “What percentage of approved claims are being paid to my competitors?” If the answer isn’t readily available, this is an excellent place to start. Dealers should have access to that data point and examine it monthly to keep a close eye on transient claims.

This is all the more important for dealers who participate through ownership of a warranty or reinsurance company: reducing or eliminating transient claims is critical to increasing profitability. For those who participate, as well as those who don’t, this can be achieved through well-crafted service contracts that include a tie-back to your dealership, carefully training service writers and service departments in best practices, and, most importantly, taking an active role in managing claims in conjunction with an administrator you trust.

As a full-service finance and insurance product provider, DOWC has a direct view into the negative impact transient claims and overall poor claims management have across the industry. It strives to anchor its dealer services with transparent reporting that explicitly quantifies transient claim rates and works diligently to reduce them. DOWC’s offers vehicle service contracts, GAP coverage, and a range of specialized products including protection for tire and wheel, technology systems, theft, total loss, as well as pre-paid maintenance packages, and more. Each of their F&I products is customizable and offers a dealer tie-back for service and repairs. In addition, DOWC assists dealers in establishing warranty companies and reinsurance companies, provides expert compliance guidance, and utilizes advanced selling platforms to drive dealer success.

Advanced technology has revolutionized vehicle safety, systems, and entertainment. With 360Shield Ceramic Coating, vehicle exteriors now reach this elevated level, benefiting from maximum protection thanks to the latest in nano-ceramic technology.

Ceramic coating paint protection products provide superior, long-lasting surfacing that forms a permanent bond. Our 360Shield Ceramic Coating contains a unique molecular coupling agent that chemically bonds to the clear coat surface. Fusing at the molecular level, it creates a hydrophobic coating delivering an amazing gloss and ultimate protection to all automotive exterior surfaces against contaminants and common environmental damages.

Benefits include:

  • Automotive Body Protection
  • Glass Protection
  • Chrome Protection
  • Plastic Molding Protection
  • Rubber Trim Protection
  • Hydrophobic Finish
  • UV Blocker
  • Super Shine Enhancement
  • Exceptional Durability

360Shield Ceramic Coating provides protection to surfaces left unprotected by traditional paint sealants. Extremely durable and water-resistant, ceramic coating creates a barrier that scares off water droplets (the “hydrophobic” effect), causing them to bead up and roll off the vehicle rather than sticking to surfaces.

This professional coating delivers an amazing gloss and provides maximum protection against:

  • UV Rays
  • Acid Rain
  • Bird Droppings
  • Industrial Fallout
  • Bugs
  • Grime
  • Tree Sap
  • Other Surface Contaminants

A professionally applied ceramic coating bonds with paint and will not wash away. The sleek, high-gloss finish prevents dust buildup, repels water, and easily wipes clean. Extremely durable, ceramic coating can last several years, comparing favorably to paint sealant that may last only a matter of months.