1. Understanding Your Dealership Insurance Program
Northwood University
October
2013

2. Presenters Today
Steven P. Gibson
President
Dealer Risk Services

3. Garage Insurance Critical Components Bodily Injury/Property Damage
Auto Liability
Other than Auto
Premise Liability
Products/Completed Operations
Other Liability Coverages
Advertising Liability
Employee Benefit Errors and Omissions

4. Garage Insurance Garagekeepers Coverage Professional Coverages
Care, Custody and Control
Professional Coverages
Truth in Lending/Leasing
Odometer and Prior Damage Disclosure
Statute and Title Errors and Omissions
Insurance Agents Errors and Omissions

5. Garage Insurance Property Coverage Insuring to Value Physical Damage
Building Coverage
Business Personal Property
Business Interruption
Insuring to Value
Coinsurance Clauses
Physical Damage
Perils and Limits

6. Garage Insurance Crime Coverage EPLI Coverage
EIL/Environmental Coverage
Security and Privacy Coverage
Directors and Officers/Minority Partner Liability Coverage

7. Claims versus Premiums
Where have we been…Where are we going…take a historical perspective.
What Insurers Look for:
- Frequency in Losses
- Severity in Losses
- Management Response

8. Understanding Your Claims
Map out your Loss Experience by Line
Look for trends in types of claims and location.
Auto Accidents
Premise Slip & Fall
Garagekeepers Claims
F & I Related Claims
Document all claims over $10K
with Management Response to control future claims.

9. Claims Strategies Initiate Quarterly Claims Reviews
Consult with Counsel
In House
Outside Firm
Review with Insurer
Claims Manager & Adjusters
Review Settlements & Options
Open Claims & Reserves

10. Risk Management Strategies
Develop Specific Strategies
Initiate Risk Management Techniques
Assign a Risk Management & Safety Committee
Analyze Claims for “How & Why”
Develop Internal Reviews & Responses
Incident Reports
Preventive Measures

11. Risk Management Specifics
Operations & Procedures
Loaner Vehicles
Demos
Test Drives
Inventory Control
Spot Deliveries
F & I Office Audit & Review

12. Risk Management Specifics
Motor Vehicle Records
Annually
Quarterly for Drivers with “issues’’
New Hires
Accident Reviews & Disciplinary Action
Employment Practices
Hiring/Termination
Annual Reviews

13. Risk Management Specifics
Review All Forms
In House Counsel
State and National Associations
Demo Agreements
Loaner Agreements
Buyers Documents & Agreements
Employment Agreements

14. Risk Management Specifics
Develop Disaster & Crisis Management Procedures
Natural Disasters
Hurricanes
Tornados
Fires
Man Made Crises
Disgruntled Customers
Employee Problems

15. Risk Management Specifics

16. Risk Management Specifics

17. Risk Management Specifics
In Miami, a customer was unhappy with the deal he got at a Ford Dealership. He drove his car into the dealership…INTO THE DEALERSHIP…got out, doused the car with a flammable…lit the match…and went outside and sat on the curb…
Car burned…dealership burned…Customers and Employees were shocked and running…1M in damage to the Dealership.
BE PREPARED…PROTECT YOUR PEOPLE, PROPERTY & REPUTATION.

18. How Much Risk to Assume? Understand your own tolerance
Evaluating loss trends and loss projections.
Determine economics of Deductibles and Retentions.

19. Identifying the Market
Identify and Understand the Garage Insurance marketplace:
Who are the Players/Insurers
Direct Writers
National Carriers
Regional Carriers

20. Developing Specifications
Begin the process 120 days prior to renewal
Develop an RFP for the marketplace.
Update Building and BPP Values
Verify with Contractor
Update Business Interruption Values
Include all forms and documents
Demo Agreement
Loaner Agreement
Employee Handbook

21. Keys to Effective Bid Specifications
Offer an organized specification with consistent data.
Include currently valued Loss History with analysis.

22. Keys to an Effective Bid Process
Approach both direct writers & agents/brokers to see the whole market.
Include a framework of coverage & deductibles desired.
Develop an internal spreadsheet to analyze offerings.
Negotiate
Premiums
Deductibles
Coverage issues.

23. Explore Alternative Premium Options
Captives and Alternative Risk Programs
Group Captives
Cell Captives
Single Parent Captives
Large Deductible and Retro Plans

24. Coverage Outside the Box
Just because your Insurer/Agent doesn’t offer a coverage, does not mean it is not available in the Marketplace.
Insurance Industry has a very broad scope of products.

25. Coverage Outside the Box
Deductible and Aggregate Buy Back Programs
Property/Windstorm Deductibles
Inventory Weather Aggregates
DIC Coverage
Business Interruption from Flood

26. Coverage Outside the Box
Stand Alone Professional Coverage
Customized policy verbiage
Broad Coverage Trigger
Security & Privacy Protection
Increasing area of Exposure
Cost of Notification & Crisis Management
Directors & Officers Protection
Minority Partners Suits

27. Summary Understand the current Dealership Insurance Market.
Be aware of your losses. Keep track of expenses & reserve changes to old losses.
Explain large losses & new loss control measures.
Use “best practices” to ensure a long-term positive effect on losses.

28. Summary
Premium Options – Look carefully at your loss experience & analyze the economics of the risk you are assuming
Think outside the box for unique coverage that meets your special needs.

29. Questions?

30. Thank You!