Don’t sleep on an updated inventory and the relationship with your insurance rep
BY JORDAN WIKLUND
HERE’S THE THING ABOUT INSURANCE—EVERYONE NEEDS IT, BUT FEW KNOW anything about it. Try having an elective operation by declaring, “I’ve got the insurance,” and see what happens.
Try doing the same after disaster strikes your shop. Many owners aren’t aware of just what their insurance covers, much less what they need to do to receive the maximum benefit.
“We try to be on the front end of the worst imaginable,” says Jordan Dunham, an account executive from Federated Insurance. “If your shop is destroyed, and with the cost of construction and materials, your building may have been insured at $1 million and now it’s worth $1.5 million, meaning you’re out of pocket for half a million dollars. We don’t want owners to get caught up in that.”
Dunham notes that some insurance agents get a bad name in the eyes of shop owners specifically because they try to do their jobs. He says that persuading some owners to reassess their building value is like pulling teeth, and the only follow-up is to get them to sign a document saying as much; then—if the worst occurs—the insurance representative and agency are protected from the shop owners when they have to deliver bad news such as, “You’re not covered for this.”
Dunham says many agencies won’t charge a dime for a reassessment and that the only cost is if your shop appraised higher than previously; then it’s simply a matter of assessing what’s changed and changing the monthly policy appropriately, pro-rating the remaining months for whatever’s left in the agreement.
DON’T BEMOAN LOANERS
Dunham says some shop owners lose sleep over their vehicular loaner agreements because they don’t know how they work or how liable they could be if a customer gets in a crash while in their loaner car.
“The No. 1 item to have is proof of insurance for your customer if they’ll be getting behind the wheel of your loaner car,” Dunham says. “Make sure they sign your agreement and that their driver's license is also valid and not expired.
“There can be a ton of liability for the owners if they loan out a vehicle to someone who is uninsured. Federated and other agencies can easily cover it, however, and the deductible is usually just a few thousand dollars. What’s more, many insurance companies have a standard driving policy, especially covering distracted driving accidents. One of the first things a court will ask is about a driving policy—was it implemented, signed, updated, and reviewed regularly? Was everyone aware of it? These are important questions.”
He also says to ensure that prospective hires and new employees have up-to-date, unrestricted, and valid driver’s licenses. Any accident, no matter how minor, could be a liability, especially when test driving customers’ vehicles.