An insurance startup reaches out to you. They provide coverage for commercial vehicles, truck fleets, sports clubs, general liability, and also offer home and umbrella insurance for your household. Their website is sexy, the quote is low, and signing up takes four minutes.
Before you decide, consider these questions. Each one helps you check two important things: How much real money stands behind the promise, and whether the person deciding your claim is on your side.
Who we are, so you know exactly who you’re dealing with
Falcon West is not an AI-run agency. We are an independent brokerage focused on personal attention and top-notch customer service. We work with growing and established businesses and high-net-worth families. We use AI and technology to speed up intake and cut down on unnecessary emails. We don’t replace brokers with a website, and we never let a computer decide if your claim gets paid. Technology is a tool for us, not our entire identity, but we do love tools that make things better for everyone.
If you want a deeper explanation of why a cheaper, faster portal often misses the real issue, read Insurance Broker vs. AI. This guide is a checklist to help you review the quote you received.
The promise
Insurance is a promise: you pay now, and someone else promises to pay later if something goes wrong.
That promise is only worth two things:
- How much real money stands behind it
- Whether the person deciding your claim is on your side
Why this structure exists
In 2025, independent agents and brokers handled 87.7% of U.S. commercial insurance premiums, according to the Big “I” 2026 Market Share Report and AM Best data.
The independent broker structure serves two purposes. It’s financially solid, and it adds checks and balances. An independent broker helps you compare complex policies and stands with you if there’s a problem with a claim.
New companies sometimes fold those separate roles into one. The firm that sold you the policy keeps the money and also decides whether to pay your claim, using its own funds. No one verifies what anyone else is doing. Each dollar they pay you is a dollar less they can show investors.
This setup doesn’t mean the company is bad. It means the usual safeguards are missing. They need to show what protections they’ve put in place. They also owe you, as someone who doesn’t buy insurance every day, a clear explanation of what you’re signing up for.
Some programs use a captive or a risk retention group for large commercial accounts. That means a detailed conversation with a broker, independent actuarial review, and real numbers you can see as an owner. That is very different from a four-minute signup where the paperwork stays hidden.
11 questions
1. What is the real legal name of the insurance company that is paying my claim?
It should be the legal entity listed on the declarations page or the certificate of insurance, not the one shown on the website.
2. Does AM Best assign a rating to that entity, and what is the rating?
AM Best’s Financial Strength Rating is an independent assessment of an insurer’s ability to meet its ongoing policy obligations. A− is the lowest rating in the “Excellent” category. That is still the standard most contracts, landlords, lenders, and boards write into their insurance requirements, and it is the standard most of the carriers we work with already meet.
“We’re not rated” is a red flag, not an answer. Find out who is actually behind the money.
3. If the business goes out of operation, who will pay my claim?
Startups go under. When that happens, somebody has to take on the open claims. Have them say the company name out loud.
Then ask: is this an admitted policy, backed by a state guaranty association (those funds have limits), or is it a captive, an RRG, or surplus lines? Risk retention groups and most captives are not covered by state guaranty funds. If they can’t name who pays after they are gone, you already have the answer.
4. If we disagree on a claim, who decides, and is that person independent of the people chasing profit targets?
If they control both sides of the table, ask it directly: what stops you from simply denying me?
At Falcon West, we don’t hold the claim check. We stay with you. That’s what an independent broker is for.
5. Will the people who require me to carry insurance actually accept yours?
Customers, the board, venues, investors, sponsors, landlords, lenders, and the sanctioning body usually have a rule that looks like “the insurer must be rated A− or better” and “must be admitted in this state.” If this paper doesn’t meet that bar, the policy can be genuine and still useless to you. A sports club that can’t get on the field, or a contractor who can’t start the job, did not save any money.
6. What is your producer license number, and are you licensed in my state?
The person selling you a policy has to be licensed where you are. Get the number. Check it on your state’s Department of Insurance website. It takes about 90 seconds. The NAIC keeps a map of those sites.
7. How much premium have you written in this line? How much across all lines? If one event hit many of your policies at once, could you pay all of them?
That’s really three questions, but one idea. A diversified insurer can absorb a related loss. A book concentrated in one line, one state, or one type of risk may not.
8. Do any of your reinsurers, captives, or other associated companies belong to you or your investors?
If their own captive or RRG reinsures their own policies, the risk never left the building.
9. What collateral secures the reinsurance, who holds it, and can you show me?
In 2023, Vesttoo collapsed after roughly $4 billion in letters of credit backing reinsurance deals turned out to be forged. The company went bankrupt. Counterparties spent years replacing the collateral. Make them prove the money exists, that an independent party holds it, and that it is secured only for risk.
10. Are you my point of contact, or do I get passed to a chatbot when I need help?
Ask who actually picks up. Ask how long they’ve been doing this work, not selling software.
These shops often put a portal in front and people in the back. The people are frequently new producers building a book, or tech salespeople who picked up a license to join the newest outfit. You’ll get a lot done on the platform. When it hits the fan, are they experienced enough to walk you through it in person?
A certificate of insurance in two minutes is the easy 90%. That is not the same as someone who can sit with you on a denial, an audit, or a missing additional insured. Buyers already leave the no-phone-number shops because chat is slow when something is actually wrong. Speed is not advocacy.
11. If you promise I’ll save a lot, show me where that money comes from.
A fat cut on the quote, plus “this is the worst year you’ll ever have,” is a close cousin of the unicorn number. It is easy to promise. It is not surplus, and it is not a claims department.
Ask: Is that savings coming from a lower fee, a thinner form, a higher deductible, or a carrier that is not rated the way your contract requires? If they cannot break it apart, you are not looking at a discount. You are looking at a hope.
Decoding the big numbers
Many pitches lean on headline figures: a unicorn valuation, a large funding round, billions in “risk in force.” None of those numbers means money is set aside to pay your claim.
“We’re a $2.6 billion unicorn.” That is what investors think the equity is worth. It is not cash set aside for claims.
Ask: That is your equity valuation, not reserves, correct? How much actual surplus does the insurance company hold, and what is your loss ratio?
“$400 million in funding.” Investors put that money in to fuel growth. They expect it to go to engineers and ads, not sit around paying claims.
Ask: how much of that is regulatory capital inside the insurer, versus operating cash at the parent? How fast are you spending it, and how long is your runway? Is any of it going into real estate, index funds, or other side ventures?
“$12 billion of risk in force.” That should make you cautious, not reassured. It is the total they have promised to pay across every policy. On its own, that is a liability. Bragging about it is like bragging about your mortgage size.
Ask: $12 billion against how much surplus? What is the ratio?
If they have written $12 billion in promises on a thin sliver of capital, one bad year can wipe them out and take your claim with it.
If they tell you they are an RRG, or they point to a new “tech-forward” rating:
Ask: who is your actuary, and are your reserves independently reviewed?
Reserves are the money set aside for claims not yet paid. If no independent party checks whether they set aside enough, the surplus number they quoted you is self-graded.
The bottom line
We’re not against technology. We use it. Cheaper and faster are good, as long as they keep the promise.
Cheap and fast are also easy if you don’t plan to pay claims, or if you replace the broker with a website and call that progress. The only way to tell the difference is to ask questions like these and watch how comfortably they get answered.
The real question is not, “What is the cheapest way to insure this?” It is, “If the worst happens, will the program respond the way we expect?”
Disclosure: These articles are for informational purposes only and reflect the opinions of Falcon West: not insurance, financial, or legal advice. Details may change; contact us for guidance on your specific needs. Read our Privacy & Data here.
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