|If you are like most dealership executives, you view the insurance selection process as a necessary evil that is best handled by your chief financial officer (CFO) or key management staff. Although this form of delegation may have worked well for your dealership in the past, it will benefit you and your dealership to take an active role into the insurance decision-making process.|
In light of economic conditions resulting in decreased auto sales and an increased need to monitor expenses, dealer principals are becoming more involved in decisions previously left to others within the operation. Choosing the right insurance carrier can save dollars upfront and in the future. For example, some insurers provide dealerships with payment programs or reporting procedures that enable owners to take advantage of expense reductions with efficient staffing and more manageable inventory levels.
Because you know your business operations better than others do, it is crucial that you take a leadership position to help protect them. By recognizing your dealership’s risks and realizing that proper insurance coverage can help protect against those risks, you can work with an insurance carrier to select appropriate coverage for your specific business needs.
Consider the three “Cs”
When selecting a new or replacement insurance carrier for your dealership, it is important to look for the following characteristics:
Regarding specific insurance contracts or policies, yours should:
When choosing coverage, be sure you:
In addition to coverage, carrier and contract, there are a number of services that insurers can provide at no additional cost or for a nominal fee. Look for a carrier that provides the following: risk management, loss prevention training and services, appraisal services, and a catastrophe team (including salvage services).
The bottom line is: the more your insurance representatives know about you, your employees and your business, the better equipped they are to offer solutions customized to your operation. Beware of carriers with limited auto dealership knowledge and claims experience. Don’t be afraid to ask for references and inquire about the depth of their experience with other local and regional dealerships. More than likely, if the representatives lack knowledge about your industry, you’ll find it difficult to seek their guidance and counsel.
Whichever carrier you select, it is important that its representatives continually work with you to keep your best interests in mind as your business evolves.
Cox Automotive’s latest Dealer Sentiment Index finds a ‘notable negative turn’ among U.S. dealers, the majority of whom took a dim view of the fourth-quarter market and their 2019 prospects.