Garage Insurance – Making The Audit Easier

If you have a garage liability insurance policy for your repair shop insurance, or for your used car dealer insurance program, then you know that your policy must be audited each year. Garage liability insurance audits can be a huge hassle or they can be a quick and easy process. Some of what determines that is up to you. Here are a few tips to make your garage policy audits go as smoothly as possible. Some of this information is based on audit requirements for Auto Owners Insurance Company garage policies and may not necessarily be part of every insurance company’s garage audit process.

Start with an accurate estimate. You will have to estimate your payroll and number of employees when you first take out the policy. Start out by making this an accurate estimate. Estimating too high takes money out of your pocket and crimps cash flow now. Estimate low makes you vulnerable to the audit trap and can hurt cash flow later. Don’t forget that clerical employees are often required to be included in the total employee count. Also, remember that active owners, partners or members are included in the total as one full time equivalent employee.

With the Auto Owners Premier Garage Policy, there are caps on the payroll basis for owners, officers, partners or members as well as for employees. Your insurance company may or may not have caps on payroll so be sure to find out well in advance about this as it can limit your preparation time and may reduce your garage liability insurance costs in the long run.

Most garage policies will not charge for strictly clerical employees. But they are also usually quite strict about the definition of clerical workers. When they say clerical, they mean that employee only engages in clerical work. Few garage operations have a strictly clerical person, but if you do, you don’t want to include them as an employee in the employee audit count and in the payroll count.

Know your categories of employees as defined by the garage policy and have those numbers ready for the auditor. Category 1 employees are usually defined as owners, officers and members as well as salespersons, sales and service managers and anyone who operates vehicles on and off premises. The payroll amount for this type of employee is usually capped and most of your payroll will fall into this category. Category 2 employees are usually defined as all other employees. Typically the payroll for this category will be very small or even zero.

By knowing what your insurance company needs from you at audit time, you should be able to reduce the time and costs of having your garage liability insurance audited each year. At Clinard Insurance Group in Winston Salem, NC, we specialize in helping used car dealers and garage and repair and body shops with their insurance policies. We write garage insurance for dealers as well as repair and body shops in North Carolina, South Carolina, Virginia, Tennessee and Georgia. If we can help you with your garage insurance, please call us toll free at 877-687-7557 and we will be glad to answer your questions.

The source information for this article comes from other articles which can be found at www.InsuranceAnswerGuy.com.

Car Dealer Insurance – The Blanket Reporting Form

Used Car Dealers with large inventory should always carry dealers open lot insurance as a part of their used car dealer insurance program. This section of the garage policy is designed to protect your inventory from losses such as wind and hail as well as collision. If you have a large inventory, especially one that fluctuates in value from time to time, then you should consider a twist to the dealers open lot coverage. The twist is a form called the dealers blanket reporting form.

With the standard dealers open lot coverage, you must choose a coverage amount that reflects your highest inventory value at any given time during the policy period. And of course, your premium is based on the amount of coverage that you choose. If you purchase too little coverage, then you run the risk of having a loss that isn’t fully covered. If you choose too high, then you might be buying more insurance than you need. This is where the dealer’s blanket reporting form can help.

When you use the reporting form on your policy, you must complete an inventory report once each month. Now the procedures and the rules for this form may vary a bit from company to company. For this example I will use the rules used by Auto Owners Insurance Company, one of our largest markets for used car dealer insurance. To start this program the insurance company will want for you to base your original limit on the average inventory value for the previous 12 months. If you are unsure of that number, then you can start with 75% of your current inventory.

There are several strong advantages of this form over the dealers open lot fixed amount form. First of all, as long as you complete and return your monthly reports on time, and as long as they are accurate, then you will have unlimited coverage. This helps smooth out the peaks and valleys in your inventory. Second of all, this form provides true blanket coverage. So if you have more than one location it won’t matter as long as your inventory report each month has the total inventory for all locations combined.

While the dealer’s blanket reporting form is not for everyone since it requires a monthly inventory report to the insurance company, it can save you money and provide more seamless protection on your inventory if you have fluctuating inventory amounts or if you have multiple locations.

Your average insurance agent will know very little about garage insurance in general and insuring used car dealers in particular. It is very important that you find an independent insurance agent who specializes in used car dealers to help you. At Clinard Insurance Group, in Winston Salem, NC, we insure over 250 used car dealers in North Carolina, South Carolina, Tennessee, Virginia and Georgia. If we can help you with your garage insurance or any other policies for your used car business, please call us, toll free at 877-687-7557 or visit us on the web at www.TheAutoDealersHelper.com.

The source information for this article was pulled from information which can be found at www.InsuranceAnswerGuy.com.

Garage Keepers Insurance for Used Car Dealers

Most used car dealers understand that they need a garage insurance policy for their business. And some even understand that they need dealers open lot coverage for their inventory. But there are some dealers out there who perform a hybrid function for their clients and we often find that these dealers have overlooked a garage coverage that leaves them wide open for an uncovered loss. If you are a used car dealer who does some repair work, you really owe it to yourself to read this article, and then check your policy to make sure you are covered properly.

The hybrid dealer that I am referring to is one who not only works on his own cars, but who works on cars owned by others. In this situation, the dealer is performing a double function from the insurance company’s perspective: a seller of cars and a repairer of cars. And this creates the need for a coverage endorsement to the garage policy that is often unfamiliar to a used car dealer.

The coverage that you need to add to your dealers policy is called garage keepers insurance. This coverage is designed to protect you for losses to your clients cars that are left in your care, custody or control. Garage keepers insurance can be broken up into two main coverage areas. One is called garage keepers collision coverage and the other is called garage keepers comprehensive coverage.

The comprehensive coverage is for fire, theft, windstorm, flood and other loss types that could occur to your customers vehicles while you have them in your possession for repairs. The collision coverage is for damages caused by collision to your clients cars while they are in your possession.

Within the broader category of garagekeepers insurance there is additional information you need to make a good decision about how much and which type to purchase. I have written other blogs on those issues and you can read them by clicking on the links below. There are also some video links if you prefer watching videos.

How much garage keepers insurance to buy – blog version

How much garage keepers insurance to buy - video version

Garage keepers Insurance explained Part I blog

Garage Keepers Insurance explained Part II blog

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping used car dealers with their insurance needs. We insure hundreds of used car dealers in North Carolina, South Carolina, Tennessee, Virginia and Georgia. If you would like help with your dealers insurance, please visit us online at www.TheAutoDealersHelper.com or call us, toll free, at 877-687-7557.

Much of the information for this article was sourced from www.InsuranceAnswerGuy.com

Used Car Dealers – There May Be Hidden Funds In Your Garage Insurance Policy

This economy has required all types of businesses to tighten their belts and make more with less. Used car dealers in NC, SC, TN and GA are no exception to this problem. But very few of them have thought to look at their garage insurance policy as a source of funds. Here’s how you might take money out of your garage insurance policy.

Basically there are two areas of possible overpayment on your garage insurance policy that might be sources of funds for you. One I call the payroll update test and the other I refer to as the inventory study.

The payroll update test simply means that if you have cut back on your number of sales persons, then you might be sitting on a return premium audit at the end of your garage liability policy term. If this is the case, you can request a change in the number of salespeople charged on your policy and have those funds returned to you now, rather than waiting for your current garage insurance policy term to run out.

The inventory study technique refers to the possibility that as sales have slowed, you may have reduced your inventory on your lot. If you insure the comprehensive and collision coverage for your inventory under dealers open lot coverage, then you may find that you are carrying more coverage than you really need. Take a moment to try and figure out what your current inventory levels are and check that against your garage insurance policy to see if you are over-insured. If so, call your agent and ask him to reduce your dealers open lot coverage to a more appropriate level. This will generate a return premium due you.

It is important to remember that both of these techniques are useful in a downward moving economy. But, when business picks up, and you hire more salespeople and begin to increase your inventory, it is important that you call your agent and have him update your policy to reflect the increased exposure. If you fail to do this, you may find yourself without enough dealers open lot coverage, or you may be facing an additional premium audit which could lead to a cash flow problem I call, the audit trap.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping used car dealers all of North Carolina, South Carolina, Georgia, and Tennessee with their insurance needs for their used car dealerships. If we can help you answer questions about your dealers insurance, please feel free to call us, toll free at 877-687-7557 or visit us online at http://www.theautodealershelper.com/.

The source material for this article can be found at http://www.insuranceanswerguy.com/