Used Car Dealer Insurance – An Overview

If you are in the car business, or thinking of getting into the car business, one area in which you will want to develop some expertise is used car dealers insurance. Insurance for a used car dealer is a bit of an unusual animal in the insurance world and there are many agents who don’t fully understand how it works. So how can a non-insurance person get it right? This article will give you the tips you need to get started in this important facet of your business. Note, the information in this article is aimed at NC used car dealer insurance, but most of the basics remain the same in other states as well.

Insurance for a used car dealer is different from a lot of business insurance policies because your inventory moves around. Not only that, your inventory is being driven by customers before they buy and is capable of inflicting huge damages on others. These factors alone make your insurance solution very unique from most other mom and pop businesses out there. So, to keep this simple, we will take these items one at a time and break it down for you.

Garage Liability – This is the place to start. You will need a garage liability policy in order to get your dealer tags. In NC, these policies are rated based on the number of tags you have and the number of salespeople you have. Also, if you furnish a tag to yourself or some other member of your family or an employee, then that will increase your premiums as well. The basic garage liability section of the NC garage insurance policy is designed to protect your business from damages done by your vehicles to other people or their property. Be very careful here to check the limits of liability that you are purchasing on your garage liability coverage. You don’t want to just chase the lowest price without considering your liability limits. The rule of thumb should be to purchase the highest liability limits that you can afford as you are trying to protect against large, unknown loss values that threaten to wipe out your business completely. Also be careful to choose adequate limits for your uninsured motorists and your underinsured motorists coverages.

Dealers Open Lot Coverage – This is protection for your cars themselves, your inventory. Here you need to select a limit that at least covers your highest level of inventory. Also, you should choose the highest deductible that you can afford in the event of a loss. Higher deductibles will reduce the costs of this insurance protection. And, if you work on cars that are owned by others, you need to consider garagekeepers insurance as well. To read more about that situation, see my blog on garagekeepers for car dealers.

Workers Compensation – If you hire employees I highly recommend that you purchase workers compensation insurance. I find that in North Carolina, many dealers skip this coverage when they only have one or two employees. This is a dangerous approach and has the potential to bring your very business down. Please take a moment to read my blog on work comp for car dealers.

Dealer Bond – In NC each car dealer has to post a $50,000 bond with the state of NC in order to obtain and maintain a dealer’s license. You can purchase this bond through your insurance agent. You can read more about this regulatory requirement here.

Property Coverage – If you own your building, or if you have business personal property that you need to protect, be sure to purchase the commercial property insurance to cover these items. Often doing this reduces your garage insurance costs as some companies will give you a multi policy or package discount for combining these policies into one package.

Now that you have a better understanding of which types of policies you should consider, I want to spend a moment on how you should choose your agent. Insurance is a funny business because it is the one business that I can think of where hiring a specialist will generally cost you less money. This is not true of doctors and lawyers of course, the more specialized they are, the more it costs you to hire them. But to add to this oddity, there is also a danger. While most doctors and lawyers will refer you on to a specialist when you are dealing in an area that requires one, few if any insurance agents will refer you to a specialist if they don’t know much about insuring your business. The scary thing here is that they will actually try to help you, and learn on your nickel. This, as you can imagine, can be downright dangerous for the unsuspecting used car dealer. Just because you have a friend or relative in the insurance business, doesn’t mean that they are qualified to help you correctly insure your business. And best of all, insurance agents who specialize in used car dealerships generally have the lowest rates available to you.

When selecting your agent, do a little homework. Google their name with the words car dealer insurance. Do they appear active in this niche business? Do they seem to understand exactly how to insure used car lots? When you talk to them, ask them how many dealers like you they insure now. If they don’t insure at least 25 or more, you can bet they aren’t specialists. If you find one that insures hundreds, then you have probably found the guys with the knowledge and the rates to really help you get the best deal at the best price.

At Clinard Insurance Group, in Winston Salem, NC, we insure over 300 car dealers across North Carolina, South Carolina, Georgia, Tennessee and Virginia. We want our dealer clients to be informed insurance consumers and to protect their businesses in a careful and considered way. If we can help you with any of your questions, please feel free to call us, toll free, at 877-687-7557 or visit us on the web at www.theautodealershelper.com.

You can read the source article and others from which this article was created by visiting the Clinard Insurance Group Blog 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.

Used Car Dealers – Has Your Peak Season Been Left Out Of Your Garage Insurance Policy?

In many retail businesses there is a peak season where inventory runs higher than the rest of the year. For most retail establishments, this ocurs the months leading up to the Christmas holiday shopping season. And most insurance policies for retail businesses have a way to account for this fluctuation in inventory. The dealer’s garage policy does not, but there is a way that used car dealers can protect themselves from this hidden monster without paying an arm and a leg to do it.

The first step is to analyze your dealership to understand if you have a peak season. I have found that most used car dealerships do have a peak season and this season generally runs from February to May. This is the time when income tax refunds are arriving in mailboxes and people go out and buy cars with the new found money. Next, take a close look at how you plan for and deal with this higher sales season. Do you purchase more cars and build up your inventory? If so, when do you start? When does your inventory get back to lower levels?

There are 3 ways to deal with this inventory fluctuation from an insurance standpoint.

The first way is to simply ignore it. This may seem like the least expensive approach at first unless you have a large loss to your lot, such as fire or hailstorm and you discover that you are underinsured without enough insurance to cover all of your damaged inventory.

The second way to handle this inventory fluctuation is to increase the limit on your dealers open lot coverage to the amount that represents your highest inventory level at any time during the year. This is certainly better than ignoring the issue altogether, but why pay for $100,000 of dealers open lot coverage if for most of the year you only need $50,000?

The third way is one that I see very few dealers take advantage of, yet it is the easiest and least expensive approach. Just call your agent when your inventory increases in February or January and raise the limit on your dealer’s open lot coverage. Then, when your inventory has dropped down in late May, give another call to your agent and have them drop your limits back down. It’s easy, simple and it affords you the coverage you need without over paying for insurance the rest of the year. Why more dealers don’t pay attention must only be because they don’t know that this is an option available to them.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping used car dealers all across North Carolina, Virginia, South Carolina, Tennessee and Georgia with their garage insurance policies. If we can be of help to you with advice or answers to your questions, or if you just want to find out how to get the best policy for the least amount of cash, 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 found at www.InsuranceAnswerGuy.com.

Dealers Insurance Policies – Two Easy Steps To Keeping Your Rates Low

Used car dealers understand that their garage policy is one of their big expenses in their annual budget. But few dealers understand how simple it can be to control the costs of auto dealers insurance. Here are two quick and easy steps you can take that will significantly reduce your garage insurance policy rates over time.

To start at the beginning, the rate that each dealer pays for garage insurance is in large part a direct result of that dealer’s insurance loss history. Our garage policies have available good experience credits of up to 40% of the policy premium. That means a dealer with excellent loss experience can pay as much as 40% less for the same coverage than a dealer with a loss or two in their garage insurance loss history. So, if you can find a way to reduce the number and severity of losses against your policy, you not only will have an easier time maintaining insurance coverage, you will be able to access the best rates out there.

One of the biggest contributors to loss history for a dealer is the accidents that happen while a prospect is test driving one of their cars. First of all, the car is unfamiliar to them, secondly they want to test out all the features so they are fiddling with the stereo, the navigation system and other features and this increases the likelihood of an accident. So how can you reduce these types of claims against your dealers insurance policy?

The first step each dealer should take is to make sure that their garage policy form is one that forces the test driver’s personal auto insurance policy to step in and pay the claims caused by the test driver of their vehicle. Not every garage insurance policy is created the same, but there are policies out there that state that as far as protection for your customer are concerned, your policy only pays if your customer doesn’t have a policy. There are two big advantages for you as a dealer to make sure that you have this type of policy. First of all, if the test driver can’t file claims on your policy, your claims will go down and you will have a better loss history and access to the best rates out there. Secondly, if your policy does not have to build in enough money to pay for test driver losses, you will find that your rates will be lower in the first place. To learn more about these types of policies, read my blog here.

Once you have the right kind of garage insurance in place, you need to make sure that all of your test drivers have their own auto insurance policy in force. It will be impossible to do this with 100% certainty but at the very least you should ask them if they have auto insurance in force now. Then ask them the name of the insurance company that they use just to sort of check on their honesty. If you want to go a step further, you can ask to see a copy of their insurance id card in their glove box. One more important question you should ask them is if they have collision coverage on their current policy. If not, then you will probably have to file a claim against your dealers physical damage coverage on your own policy if they wreck your car. This will be the only way to collect for the damages to your vehicle.

At Clinard Insurance Group in Winston Salem, NC, we write insurance for hundreds of used car dealers all across NC, SC, GA, VA, and TN. If you would like for us to help you with your garage insurance, please call us at 877-687-7557 or visit us on the web at www.TheAutoDealersHelper.com.

The source information for this article was drawn from articles 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/

What Would You Do With An Extra $343 In Your Pocket?

Our research indicates that on average we save our new clients $343 on each policy that that bring to us when they switch from their current insurance company. We specialize in helping people with their home insurance and their car insurance of course, but we also help small contractors and small businesses with their general liability and workers compensation insurance as well as helping automotive repair shops and used car dealers with their garage insurance. So we got to thinking. What will all of these clients of our do with the $343 that they each saved?

Here are a few ideas. Let’s say you are a gadget person. You could get yourself a new iphone and still have about $40 left over for dinner. Of course you would use one of those tricky new iphone apps to pick out the restaurant you want to visit. Already have an iphone? Well besides oozing with cachet, you could now purchase about 150 or so cool apps for your phone.

Not into electronic gadgets? I know, you can visit your nearby retail clothing store and pick out 4 or 5 tops and 4 or 5 cool pants or skirts to go with them. And still have a little money in your pocket to share with those pesky teenagers of yours.

Are you a golfer? Well if so, you could purchase 11 dozen Calloway golf balls with your personal name engraved on each one. I’m a terrible golfer and lose balls on every outing but that would last someone like me a couple of years! And hey, if you do play golf, don’t forget to up your liability on your homeowners policy in case one of those golf balls hits someone as it careens out of bounds.

At Clinard Insurance Group in Winston Salem, NC, we work hard to provide all of our clients with the very best insurance coverage at rates that give them a chance to spend some money on things that they enjoy. We know paying for insurance is unpleasant and we want to do our best to make sure that you have the protection you want and need without overpaying for it. If you would like top notch, professional advice with no fee at all, give us a call at 888-787-6557 or visit us online at www.clinardinsurance.com.

The source information for this article was pulled from www.insuranceanswerguy.com.