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.
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.
Let’s begin with those areas determined by State Statue:
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.
Let’s begin with those areas determined by State Statue:
When was the last time you provided your agent with a look at your entire insurance portfolio?
There are many steps you can take to protect your business, live in the now and prevent an urgent crisis before it ever occurs.
One of the best ways to protect yourself and your business is with an annual insurance checkup. The time spent can help you understand your exposures, prevent gaps and save you money.
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 for Texas auto dealers.
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’.
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
Read on to learn more:
If you simply lost your title, replacing it is easy, does not require a bond and can be completed in four easy steps.
Bonded titles are a whole other story. If a vehicle arrives in Texas with ownership questions, the owner of the vehicle is likely to be asked to obtain a bonded title. Attach a surety bond to a title and you have created a bonded title. There are options to a bonded title, such as a legal hearing, but getting a surety bond is typically much less expensive and certainly faster. There are five steps to take in obtaining a bonded title…
When should I buy property insurance? That may seem like a strange question, but let’s pretend you are a brand-new dealer, probably leasing a location. The question becomes appropriate when considering what insurance is applicable to BOTH your operations exposures and your insurance budget. In that context, property insurance falls now in the line of priority.
In this helpful article we break down the insurance types and priorities for when to purchase the insurance you need.
Should I Insure My Inventory? This question comes up much more often than one might think and, in working with my clients, I know why:
There are so many options available…And no two dealers think exactly alike!
Insurance philosophies are different.
Insurance budgets are different.
Business goals are different.
Lienholder requirements are different.
In this blog, let’s forget the source, i.e. the agent, of solving your dealer insurance need and just think about the many insurance options available to fill the blank.
As of September 1, 2021, we have another change in the Texas dealer bond requirements:
“Texas House Bill (HB) increases the amount of the surety bond from $25,000 to $50,000 that an application must provide to the Texas Department of Motor Vehicles as a condition of a new or renewed motor vehicle dealer or wholesale motor vehicle auction general distinguishing number.
HB 3533 was approved by the governor on June 14, 2021 and becomes effective on September 1, 2021.” (Corporate Compliance Bulletin TX -2021-37)
Because the rate per thousand is currently unchanged, the resulting cost of dealer bonds will double for the same two year period to correspond with the doubling of the protection.
Cyber-Liability – Just the word has a science-fiction sound and feel to it! Add the bitcoin ransom requests we hear about every day and I wonder if I have entered some sort of Twilight Zone. Be that as it may, the truth is every business, large, small and in-between, is subject to some sort of cyber liability claim.
If you use a computer to send, receive or store electronic data, your business is at risk. Tax records, company documents, customer information, etc., all such data can be lost, damaged or stolen. Most of us have our employees’ information stored: social security numbers, health records, maybe even credit card numbers. Regardless of how the information is lost, restoring it is likely to be both time consuming and difficult. Bad enough to think about losing our data, but that thought can quickly morph into a nightmare when we realize that a data breach can be the onset of third-party claims and/or lawsuits.
Deciding what to do about our cyber loss exposures is the question, not if we have any exposures.
Some things lend themselves to regular check-ups and some things do not. Insurance too often falls into the latter category.
With the speed of today’s life and our day-to-day activity, it can be too easy to sign the renewal paperwork, write a check and move-on. That works very well for a lot of dealers for a lot of years. As long as your insurance needs remain unchanged, it is likely your current policy is providing the correct protection — likely, but not positively. And the scary part is that you will not realize where the coverage is lacking until you have a loss jeopardized by inadequate protection.
The best time to review your insurance is:
I’m pleased to announce we have begun to receive e-mail feedback from this column.
David W Scott posed the first question:
“I saw recently a packaged Business Owners Policy for an auto paint and body shop which had been endorsed with garagekeepers coverage, but did not say anywhere the $1M/$2 M liability on the policy would also extend to the employees driving the vehicles in/out and around the shop. Is there a garage liability endorsement that should be added to the coverage page?”
Life as a small businessperson is filled with pitfalls, seems as if there’s a new “gotcha” on every corner and the old ones never disappear. I’ve never bought and sold cars, but I’ve been self-employed and am familiar with the need to watch one’s back at every turn. It’s the little things that can cost a ton of money and time. As they say, the devil is in the details, and they can cost even a prudent man his business. It behooves us to take reasonable precautions in our day-to-day business operations.
Few things are more frustrating than getting less than what one thinks they paid for. When we make a deal, whether it is to hire a job done, buy a car, secure insurance or anything else, we assume all parties will keep their ends of the bargain. If you are paying fifty dollars to have a couple of cars washed or detailed, you anticipate that will happen before you part with the money. If you are buying a car, you check it out first to be sure you are getting your money’s worth. Payment-after-the-fact eliminates a lot of the buyer beware dangers that accompany most purchases. Insurance does not lend itself to such a safeguard.
On January 18, 2010, a fast-moving fire gutted part of a car dealership in west Houston. The two-alarm fire was confined to a building that housed the used car showroom. I don’t know any of the specifics of this fire or the results of any investigation into the blaze. I just know fires occur with regularity regardless of the season, the industry or the value of the property burned. I’ve worked with clients who had the foresight to buy property insurance and those who didn’t. Take my word for it, it is much more pleasant to work with those who have the coverage they need at the time of loss.
Recently one of my dealers opened our conversation with ‘I feel as if I get up in a new
world every day!’ I identified immediately with that thought because lately I have spent a lot of
time studying insurance forms and answering calls regarding virus coverage and now riot and
civil commotion. These are not areas of the insuring contracts that have been front and center
during my first thirty years of working with car dealers! Sometimes, as the world changes, I find
myself running to catch up. In an earlier blog, we talked about Covid19; today, let’s talk about
riot and civil commotion.
Mullen Agency has been associated with and a supporter of Texas Independent Auto Dealers Association for thirty-plus years. TIADA is focused on protecting the industry from over-regulation and provides powerful advocacy and a full-time lobbyist. So, whether a member or not, every independent Texas auto dealer benefits from TIADA’s existence. That alone is enough to make me a fan! After all, Texas used car dealers comprise a majority of Mullen Agency clients and they are who we have worked for and with since our doors opened in 1988.
Business Income and Extra Expense protection is on the mind of many dealers
right now and based on the calls we’ve received, there is confusion as to whether or not
this protection could apply to losses due to COVID 19. The short answer is:
As COVID-19 continues to reek havoc in the business world, it is important that we share with our clients Mullen Agency’s situation. As an ‘essential’ business, our offices remain open.
We are operating during our normal business hours so you can receive the answers and services you need. Although we have a limited staff, all inquiries will receive a response within a reasonable amount of time. We are taking all precautions as advised by local and federal agencies as well as the CDC.
Income tax season often brings ‘audits’ to mind and it occurred to me it might be a good time to talk a little about insurance policy audits. They are rarely as painful as an IRS audit, but they can be a real hassle if you are not prepared. So, let’s cover the basics of getting prepared and knowing what to expect from your next insurance audit.
Confusion runs rampant among insurance buyers when it comes to the differences between admitted and non-admitted markets. When I first became active in the property and casualty insurance business, I was taught that it was always more advantageous to use an admitted market vs. a non-admitted one when seeking to protect my clients’ interests. That certainly sounded logical then, and still does today, but my experience has educated me beyond that simple statement. I’ve learned there are caveats to be considered when choosing a proper insurance carrier.
What’s the first step a dealer should take after a disaster happens? Well, the first steps should actually be before the disaster happens. Let’s take a look a 4 key steps to take before the clouds roll in.
Based on our ringing phone, our access to the new Auto-Hail Safe product has gotten the attention of a lot of Texas Auto Dealers. So much so, that I decided a brief informational website article might be of help to all independent auto dealers.
This policy is the first ever parametric hail insurance policy with immediate hail storm payouts, no deductibles and…
When was the last time you took a close look at your garage liability policy? Well, that’s too long ago!
Seriously, I suggest you get it out for just a minute to read the Item One section, Named Insured, on the Garage Declarations page. It’s so easy to skip over this section but it’s vitally important for your business.
In today’s economy and with rapid changes taking place across industries, employment practices liability claims have become a reality.
No longer is the exposure limited to large companies or larger corporations. Indeed, smaller companies are equally at risk.
There are a number of ways small business people can protect themselves by being proactive in the management of their insurance program. One important important way small business owners can protect themselves is with the purchase of workers comp insurance.
If you have ever lent a car or provided a loaner vehicle and the borrower had an at-fault accident, you have likely experienced the liability headaches associated with the practice. Even if you haven’t had personal experience with the perils involved, a knowledgeable garage insurance agent has mentioned them to you on multiple occasions.
A couple of days ago, a new dealer came into our office in search of a bond and insurance for his business. Once he had his bond in hand, he sat down to talk with an underwriter, and I overheard a conversation that went something like this.
Mullen Insurance Agency, Inc. was born in 1988 as a natural outgrowth of Ann Mullen’s Farmers Insurance Agency and we have continued to grow and develop our insurance expertise in solving both the commercial and personal insurance needs of our fellow Texans.
We share auto industry news and highlights on our Facebook page. Dealers tell us they always find something of interest there! Be sure to leave us a note saying you dropped by.
Mullen Insurance Agency Inc was born in 1988 as a natural outgrowth of Ann Mullen’s Farmers Insurance Agency and we have continued to grow and develop our insurance expertise in solving both the commercial and personal insurance needs of our fellow Texans.
We share auto industry news and highlights on our Facebook page. Dealers tell us they always find something of interest there! Be sure to leave us a note saying you dropped by.
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