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

Garagekeepers Insurance – How Much Is Enough?

Automotive repair shops and used car dealers both need a garage insurance policy. Included in this policy is a coverage call garagekeepers insurance. In the case of automotive repair shop insurance or body repair insurance, this is protection to cover loss and damages to customers’ cars left with the repair shop. In the case of the auto dealer insurance, this coverage is often referred to as dealers open lot coverage and provides comprehensive and collision protection for the inventory owned by the used car dealer. But how do you as an auto repair shop or body shop owner know how much garage keepers insurance to buy?

In this article I want to stay focused on the repair shop with true garagekeepers insurance and I will leave the dealers open lot question for another blog. Repair shops and body shops are all different in terms of how they deal with customers’ vehicles left with them for repair. Some never need to test drive the cars and some need to do extensive driving. Others are able to keep all vehicles inside their building at night while others may even have to park client cars out on the street. Each situation presents different dangers and exposures to the repair shop owner.

Garagekeepers insurance can be broken down into two coverage elements. One is collision coverage and the other is comprehensive. The collision coverage will pay for losses caused to client vehicles that are damaged by a collision. This happens most often when the car is being test driven. The comprehensive coverage provides protection against, fire, hail, water damage and a host of other losses that can happen to your clients’ cars while they are in your care. So how do you decide how much coverage to buy?

Let’s take collision first. I suggest that you carefully try and understand the worst case scenario for a collision loss to one of your client’s vehicles. Assume that your employee has a total loss with the most valuable car that you would ever work on. That should put you in the ball park of how much coverage you should purchase.

With comprehensive coverage on your garagekeepers coverage, you need to try and imagine the worst case scenario for this type of loss to your clients’ cars. If you keep them inside at night, what would it cost to replace the cars if you had a total fire loss overnight and every customer car in your garage was totaled? If you keep them outside, what amount of damages would be caused by a severe hailstorm or a flood if that is possible in your location? Don’t forget to consider vandalism in your worst case scenarios as well.

Once you have done this, you will need to take the largest of the two numbers that you arrived at and purchase that amount of garagekeepers coverage. The reason is that most insurance companies won’t let you purchase one amount of coverage for collision and another for comprehensive. There are a few companies that will allow this but they are few and far in between.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping owners of auto repair and auto body shops with their insurance needs. We work hard to help all of our clients become informed insurance consumers so that they can make the best decisions when it comes to insuring their businesses. If we can help you with your garage insurance, please call us, toll free at 877-687-7557 or visit us online at our auto repair and body shop insurance help site.

The source information for this article was pulled from an article which can be found at 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/

Garagekeepers Insurance – Direct, Legal Liability, Primary and Excess - what are these choices now?

The Garage Liability policy is one of the most misunderstood types of business insurance policies. It is a unique type of policy and many seasoned professional insurance agents don’t really understand it well. Attached to the garage liability policy, one often finds a coverage called garagekeepers insurance. At Clinard Insurance Group in Winston Salem, NC we understand this form very well and in part 2 of my blogs on garagekeepers insurance I hope to continue to clear up some of the confusion about this policy form.

As we discussed in the my last blog, the garagekeepers form is a coverage that can be added to the garage form and it allows for protection for the your clients vehicles, left in your care while you are repairing them. This coverage includes both comprehensive and collision coverages for those vehicles.

When purchasing this coverage, there are 2 more choices you will need to consider. The first is the question of Direct coverage, verses Legal Liablity coverage. If you purchase direct coverage, then your policy will pay the claims for collision and comprehensive coverage for your client’s vehicles whether you are at fault in the loss or not. If you choose legal liability coverage, then these claims will only be covered if your repair or body shop can be found to be legally liable for the loss. Of course the direct coverage will be a bit more expensive but you may choose it so that you can quickly pay the damages caused to any of your client’s cars.

The second question that you will want to answer is whether or not you want to purchase Primary or Excess coverage on your garagekeepers coverage. Primary coverage means that your insurance policy will pay, first dollar on the covered loss, while excess coverage will only kick in an pay when there is no coverage on your client’s insurance policy, or if the limits of your client’s policy are not high enough to cover the loss. Of course the primary option is more expensive but it may generate better client relationships if you are paying the claim and not forcing them to file on their own personal auto insurance.

At Clinard Insurance Group in Winston Salem, NC, we write over 300 garage policies in 4 different states and we can help you make sure that your policy is set up correctly so that you can have the best possible protection at the lowest possible price. Give us a call, toll free at 877-687-7557, or visit us on the web by clicking here.

The source material for this article can be found at The Insurance Answer Guy.

Garagekeepers Insurance – How Does It Really Work?

The Garage Liability policy is one of the most misunderstood types of business insurance policies. It is a unique type of policy and many seasoned professional insurance agents don’t really understand it well. Attached to the garage liability policy, one often finds a coverage called garagekeepers insurance. At Clinard Insurance Group in Winston Salem, NC we understand this form very well and I hope to shed some light on this to eliminate some of the confusion that business owners often have about this protection.

The garage form is a liability based coverage that has been created especially for car dealers and automotive repair shops. Basically if you are in the business of buying, selling or repairing motor vehicles, you will need this coverage. The confusion relating to the garagekeepers coverage I think comes from the name. Just having the name garage in this form confuses people. Auto repair shop owners often wonder why they need garagekeepers coverage if they already have a garage policy. The garagekeepers form is an add-on coverage to the garage policy and it is designed to covers losses occurring to customers’ cars that are left in the possession of the repair shop. So if you are repairing cars and your building burns down in the night and you have 3 cars inside, you had better hope you have garagekeepers coverage on your policy or you will be buying your clients new cars on your own dime.

The garagekeepers form can include either comprehensive coverage, or collision coverage or both. When you purchase this coverage you should try and accurately predict the largest possible loss that could occur to customer cars left on your premises or repaired by your shop. You will also want to choose appropriate deductibles for the comprehensive and collision coverages.

In my next blog I will discuss the differences between direct primary and excess liability coverage for the garagekeepers form. As you can see, insuring a repair or body shop or a used car dealership requires an unusual coverage form that is not well understood by a lot of insurance agencies. If you own a repair shop, or a body shop, or if you own a used car dealership, you need to make sure that you are using an agent that specializes in these types of businesses. At Clinard Insurance Group in Winston Salem, NC, we write over 300 garage policies in 4 different states and we can help you make sure that your policy is set up correctly so that you can have the best possible protection at the lowest possible price. Give us a call, toll free at 877-687-7557, or visit us on the web by clicking here.
The source material for this article can be found at http://www.insuranceanswerguy.com/