Insurance for the automotive industry is a specialized field and the biggest mistake that garage owners make is basing their insurance buying decision on price only. Concerns over premium costs can be an important factor, but knowing what is being offered for that price should be a deciding factor in the event there is a loss. For those shopping, it helps to know what is actually being purchased. There are major coverage differences between used car dealer insurance packages. In this article we will outline some major coverage issues between different garagekeepers packages. Legal Liability This is very basic, and available on most of the less expensive garage packages. If a customer’s vehicle is damaged, the customer must prove that legally liable (negligence) on the part of the dealer in order to recover damages from their insurance. This will not only create a loss of goodwill if coverage is denied, but it also ruins any relationship that may have been built with that customer. Direct Excess Better than a Legal Liability policy because it doesn’t require the customer to prove negligence on the part of the dealer. However, this coverage only applies after the client files a claim with his own personal auto insurance policy. If the client’s personal auto insurance denies the claim or the client’s policy limit doesn’t cover all of the damages, then the garagekeepers insurance would apply. Direct Primary This is the best coverage available because it takes the burden off of the customer and in the event that a customer’s vehicle is damaged while in the care, custody and control of the dealer, they will still be able to keep a strong customer relationship. Coverage is provided by the garagekeepers policy without the need to prove negligence and legal liability. Therefore the client doesn’t need to file a claim on his personal insurance. The garage owner is taking responsibility for the customer’s vehicle while its in their care, which is also the assumption that most customers have when they drop their vehicle off for service. Garagekeepers coverage pays for the loss from the first dollar without regard to, or contribution by, the vehicle owner. Of these three coverages, Direct Primary is the most expensive, but also provides the best coverage. The difference in price can be less than $100/month to go from basic Legal Liability to Direct Primary coverage. Keeping customers happy keeps them as customers, and keeps them referring new customers, which will help grow the business.
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