The two policy forms most used in Texas are the Auto Dealers Coverage Form and Garage Coverage Form.  The data included here is based on the Auto Dealers Coverage Form and is not intended to provide all the nuances and/or explanations of every coverage and/or exclusion.

For the purposes of this narrative, we will hit only on the ‘high spots’ and those I believe to be of most interest to the typical Independent Auto Dealer.

The first few pages of every insurance policy are called the Declaration Pages.  These pages will include:

ITEM ONE

• The name of the company providing the protection

• The name of your agent

• The named insured. Check this area carefully to be certain your business name and address are correctly shown.   If you are to be named individually, your name should be included here.  Be sure your business form is properly indicated as sole proprietorship, corporation, partnership, limited liability company or whatever is the proper designation.

• The next completed of interest is the premium. Note there is also a section to state whether the policy may be audited and, if so, on what terms.  Most liability policies are subject to annual audit, but more often not, garage policies are NOT actually audited.    You should check this closely to avoid any ‘gotchas’.  Garage premiums are based on, among other things, who works there and what they do.  If a policy is audited, the insurance company will require proof of employee changes, etc.  For instance, if the policy was written with two owners only, but the audit reveals a lot person, a mechanic, someone with a furnished auto, contract drivers, whatever the audited real history is, there will be a premium adjustment made.   The reasoning is: Audited policies provide coverage based on the real circumstances regardless of interim company reporting.  That is rarely true with non-audited garage liability policies, i.e. coverage is provided only as originally presented and subject to whatever endorsements the insured may have requested during policy term.

ITEM TWO

• The next pertinent section lists the various coverages available. If there is not a covered auto symbol, a limit and/or a premium shown for a particular coverage, there is no protection provided unless the word ‘included’ is shown in the premium area.

• Auto Symbols are important. The ones you are most likely to see next to your covered auto limits are:
  1. Symbol 21 — Any auto. This is the broadest auto liability available under a garage policy.
  2. Symbol 22 – Owned autos only and any non-owned trailer attached to an owned vehicle.
  3. Symbol 23 – Private passenger autos only
  4. Symbol 27 – Specifically Scheduled autos, such a service vehicle or designated auto
  5. Symbols 29 – Non-owned autos used in connection with business.

• • The other areas where auto symbols are likely to appear are:
    1. Personal Injury Protection and Un-Underinsured Motorist– Probably 22 or 25 or 26 or 27 – Vehicles subject to non-fault protection requirements.
    2. Auto Medical Payments – Symbol 22 or 27
    3. Garagekeepers -Symbol 30 – Cars you do not owned, but in your care, custody and control for service, repair, storage or safekeeping
    4. Physical Damage – Symbol 31 – Vehicles you own outright or may be financed and/or consignment vehicles held for sale.

• Areas where premium and/or limits may be listed when coverage is provided:
  1. General Liability
  2. Locations and Operations Medical Payments
  3. Dealers Errors & Omissions
  4. Premium For Endorsements

ITEM THREE

• This area lists your location addresses.  Review to be certain they correctly shown and that all locations are listed.  If you have more than three, they may be listed by endorsement

Your exposure to liability and property damage losses is determined by your business plan and goals. Each dealer’s insurance plan should be designed to address the unique vulnerabilities of his/her operation. There are insurance products to extend from the rural mom/pop businesses to multi-location, state-wide ventures.

That is a question we hear every day and one we have heard for thirty-plus years. Yes, there are some insurance and bond coverages that are dictated and required by law for every Texas dealer. But, that is only the beginning of the answer.

Your operation is unique to you. Only you, in discussion with an experienced garage insurance agent, can determine what and how much protection you and your business need to satisfy your insurance philosophy and stay within budget.

If you are like me and so many owners of small to medium sized businesses, you suffer from ‘time-shortage’.  There are not enough hours in the day and too many of the ones we have are spent dealing with whatever today’s crises are.  

Indeed, oftentimes even when I make a real effort to stay in the ‘now’, I find I am addressing a challenge I should have recognized and solved much earlier.  It was a ‘now’ situation a month ago; it is an ‘urgent’ situation today. 

Over my thirty-plus years of working with Texas Independent Auto Dealers, Mullen’s job as a ‘Garage Agent’ has been both enviable and rewarding.  Our Texas Used Car Dealer customers are a pleasure to work with because they are typically:

• Creative
• Optimistic
• Intelligent
• Excellent Judges of character
• Open to New Ideas and possibilities
• Family and Community Oriented
• Curious
• Well-Educated in their industry
• Hard-working
• Focused
• Business Owners with Character and Courage

And those are just a few of the reasons the Texas Independent Auto Dealers industry is Mullen Agency’s insurance niche and focus.

As we all know from personal experience, finding affordable property insurance, both building and contents, has become a challenge.  With that thought in mind, our Mullen Team has worked diligently in all directions in search of a product we could proudly offer to our Texas Independent Auto Dealers and one that still did not have a premium to break the bank.

We now have such a product and are eager to share it with our insureds.   For thirty-plus years, we have enjoyed our Lloyds’ relationships and resulting inventory physical damage binding authorities.  And, again, one of our London contacts and supporters answered our call for help.  This product can be written on both an actual cash value and replacement cost basis, depending on the specific situation.  Wind/hail coverage is available and deductibles depend upon location, as well as other underwriting guidelines.

NMIADA is working with the Speaker of the House and Senate President Pro Tempore to pass legislation requiring documentation from the seller of a Catalytic Converter in the state of New Mexico. Catalytic Converter theft is a significant issue facing auto dealers and citizens and NMIADA is working closely with the Legislature to get legislation passed that will make it illegal for junk yards to purchase anonymous catalytic converters. A written paper trail will allow law enforcement to effectively follow sales in the state. This bill will receive it’s first hearing at the Senate Public Affairs Committee on either Wednesday or Friday this week. We are asking interested dealers to participate in helping to pass this important legislation by: 1. Sending me your experience(s) of having catalytic converters stolen from your lot in the last couple of years; 2. Show up at the Committee hearing to testify about your own experience and why the bill is important (we will send out schedule once it is made by the Committee) 3. Call or email the Speaker of the House or Senate President Protempore in support of the bill. Click here for a copy of the bill.

Lately, I’ve spent a lot of time talking to dealers about inventory.  The topics range from ‘There are no cars available’ to ‘There are plenty of cars out there, but the cost is impacting my business plan’ to ‘Insuring my inventory at the same time I satisfy my insurance budget has become nearly impossible’. I guess the truth is I try to steer the conversation to that last topic so I can talk about an area where I have some knowledge.  The economy changes, business plans change, both vehicles and insurance costs fluctuate with conditions whether it is Cash for Clunkers at the beginning of an economic recession that we faced several years ago or an inability to get microchips from China or gas prices that create more homebodies.  I can speak for only one piece of the puzzle: insuring your dealer-owned inventory.

There are multiple reasons why a garage insurance policy may be non-renewed by the carrier, some of which you, as an insured, have no control over.  Indeed, we are seeing a lot of those lately including:

• Agent no longer associated with carrier
• Carrier’s program withdrawn from Texas

Garage insurance markets fluctuate with carriers coming and going, but the last couple of years have seemed particularly bumpy.  Some of the most well-known carriers have pulled their auto dealer garage programs from Texas, companies such as Southern Pioneer, Zurich, Catlin, Indian Harbor, Acceptance, to just mention a few.  

If you simply lost your title, replacing it is easy and does not require a bond. Four easy steps:

1. Visit the nearest TxDMV regional service center
2. Complete the Application – VTR-34 – all recorded owners must sign the form at the time of application
3. Provide a photo ID
4. Pay the $5.45 fee. An original release of lien letter may be required.

And ‘boom’ you will receive a certified copy of your title.  There are a few more steps and hurdles if the title happens to have lien or be in the name of trust.  Still, procedure is relatively easy and does not require any bond.