Garage Insurance – Division I or Division II?

It is often said that the garage insurance policy is one of the most misunderstood forms of insurance. The problem is that this form of insurance essentially is a hybrid of a general liability insurance policy and a business auto insurance policy. More than that though, this form is a specialized form, used only for auto body and repair shops and auto dealers. Given that, many agents, who don’t specialize in helping these specific industries with their insurance needs, don’t really understand the ins and outs of the garage insurance policy and as a result they may issue a policy to you under the wrong form. So how do you know if you have the right protection?

First of all, understand that although the garage liability policy is appropriate for both an automotive repair shop and an auto dealer, within that group, you need to have the correct classification on your garage insurance policy. There are 2 different divisions of coverage on the garage policy, Division I and Division II. These divisions not only affect the policy form itself, but they also impact on the rating structure and how your final premium is determined. For these reasons, it is important that you have your policy set up correctly in the first place whether you are buying auto dealers insurance or automotive repair insurance.

Division I is the division that should be used if your business is an auto dealership. If however, your business is automotive repair or body work, then your garage liability policy should be written as a division II garage insurance policy. If you are unsure whether or not your policy is set up correctly, you can check to see which division your policy is written on by checking the declarations page of your garage insurance policy.

What happens if you are involved in auto sales and auto repair? If that is the case, then your policy should be written on the Division I form.

As you can see, there are a lot of tripwires out there for business who repair or sale cars who are looking for a garage insurance policy. You need an insurance agent who specializes in the garage insurance policy and helping both car dealers and automotive repair shops with their insurance needs. At Clinard Insurance Group in Winston Salem, NC, we are that specialist. Our used car dealer clients and our auto and body repair shop clients are located all over NC, SC, GA, TN and Va. If we can help you with your garage insurance questions, or if you would like a quote on your current insurance program, please give us a call, toll free, at 877-687-7557 or visit us our auto repair and body shop web page or our used car dealers insurance help site.

The information used for this article can be found in its entirety at www.InsuranceAnswerGuy.com.

Auto Repair Shops Workers Compensation Insurance – Protect Your Mod

Most automotive repair and body shop owners have at least a general knowledge of workers compensation insurance. They know that they need it and they know it can cost a lot of money. But only a few really understand the experience modification factor and what it could mean for their future work comp insurance policy costs. This little primer will help you understand just how important it is to protect your mod and how to do it.

The experience modification factor of workers compensation policies, referred to as the experience mod or just mod for short, is the insurance industry’s way of assigning higher rates to businesses with poor loss experience and lower rates to those who have had more favorable loss experience. Each business has its own unique experience modification factor and this factor is applied to the rates on their policy. For example, if you have had a lot of losses, or perhaps a few large losses, you might find yourself with a mod of say, 1.35. If this is the case, then your workers compensation insurance policy premium will be adjusted upward by 35% to reflect your bad experience. Likewise, if your company hasn’t has a work comp loss for several years, your mod might drop as low as .80 and this would mean a 20% reduction in your overall workers compensation policy premium.

So how is this mod calculated? Well, the first thing you need to know is that the mod is calculated based on past experience. That means what happens today will take several years to come back and bite you. Also, the experience period for the mod in North Carolina is 3 years, so once you get some losses in your mod calculation, they will stay there for a while. I want to leave a more detailed explanation of how the mod is calculated to a later blog, but for now, understand that it is not only the number of losses (called frequency) that plays a part, but also the amount paid out (called severity) that impacts the mod calculation. And a little of both, frequency and severity can really run up your mod.

So what can you, as a business owner, do to protect your mod? A lot of how your mod will affect you, both good or bad will be determined by which insurance company you choose for your workers compensation policy. I say this, because, although you may be as careful as you can to avoid injuries among your workers, there is no substitute for an insurance company that is actively working for you to help you prevent claims and reduce the severity of existing claims. So when evaluating which workers compensation policy to purchase, you should consider more than just the cost on the first policy. Find out what that insurance company and that agent are going to do to keep your costs low over the long term.

Choose a workers compensation insurance company that will work with you to help you with both prevention and severity reduction. Prevention can come in the form of safety inspections, and loss control techniques that the insurance company can share with you. Reduction can come in the form of programs that help your injured workers get back to work more quickly. Some of the best workers compensation insurance companies even have their own nurses and doctors. Also, you want to purchase your workers comp coverage from a company that assigns case managers to each claim to stay on top of all the medical bills and the disability payments to keep the payout as small as possible.

At Clinard Insurance Group, in Winston Salem, NC, we specialize in helping the owners of automotive repair and body shops navigate the complex waters of insurance policy and insurance company selection. We can help you find a pro-active insurance company that will help you reduce the number of work comp claims and keep the claims that happen from spiraling out of control. We can also help you with your other insurance needs from garage insurance to commercial auto insurance for your wreckers or company trucks. If you would like help with any of your business insurance needs, please call us, toll free, at 877-687-7557 or visit our garage owners insurance help page.

The source information for this article was taken from other articles which can be found in their entirety at www.InsuranceAnswerGuy.com.