Pub. 11 2012-2013 Issue 4

N e w J e r s e y C o a l i t i o n O f A u t o m o t i v e R e t a i l e r s w i n t e r 2 0 1 3 16 new jersey auto retailer Dealer’s Physical Damage (inventory coverage) rates, in some cases, are rising even more. This is a significant change from the buyer’s market we have seen for much of the past decade. In addition to increased premiums, larger deductibles have become more commonplace. Higher deductibles are a de facto premium increase. The dealer’s real insurance cost is a combination of both premiums and deductible costs. Another development in New Jersey and nationwide, is a wider disparity in garage program quotes. Until recently, bid premiums were often within a 10 to 20% range. As an example, for a single point store, bids would range from $90,000 to $110,000 for similar coverage. Today the quotes may well range from $90,000 to $150,000. This emphasizes the need for dealers to get as many insur- ance quotes as possible to avoid being stuck with a renewal at the high end of the range. Some carriers that have entered the dealership marketplace in recent years are now seeking the most aggressive rate increases. To make matters more challenging, insurers are requiring more detailed informa- tion related to past claims, loss control, buildings and employment practices. This is often used as a strategy to determine which dealers to quote and even which dealers to give the most advantageous rates. As insurers tighten their underwrit- ing requirements, a willingness to submit the required information may have a positive influence on the dealership’s ultimate quotes and premiums. The 2013 Insurance Market What Did Super-Storm Sandy Leave Behind? By Roger Beery T he insurance market continues with its push for higher premiums, especially for dealers who accept their renewal terms without seeking competitive alternative quotes. In many cases, dealers with good loss experience (losses less than 25% of premium) are finding their garage and package rates going up between 8% and 15%, while those with poor loss experience are seeing even greater increases. Anton Oparin / Shutterstock.com