Pub. 13 2014-2015 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 I S S U E N O . 1 , 2 0 1 5 10 new jersey auto retailer BY JOHN BIROFKA You ’ ve wo r ked ha r d t o bu i l d you r dea l e r sh i p . Insur ing i t proper ly is the key to protect ing i t . The fol lowing are some of the most f requent l y asked quest ions by Dealers regarding thei r insurance cove r ages . Are All Your Exposures ADEQUATELY COVERED? Q Is my property (Building(s) & Personal Property) insured properly? A Most business owners insure their property for replacement cost ver- sus depreciated value. In order to confirm replacement cost of your improve- ments, an appraisal should be performed by a licensed appraisal company. Make sure your property is insured to at least 80% of Replacement Cost in order to avoid coinsurance participation at the time of a partial loss. However, I recommend that you insure your property on an “Agreed Value” basis which waives the coinsurance requirements altogether. If you plan not to replace the property after a loss, then you can insure just for the depreciated value (Actual Cash Value) using a lower depreciated limit. Q How much Business Inter- ruption (BI) do I need? A Your policy limit should be no less than your twelve month gross profit for all departments. Your indemni- fication period should be no less than twelve months, and there should be no coinsurance or monthly limitation. Waiting periods, a form of deductible, is applicable to Business Interruption. The waiting period can range from zero to 72 hours. Dealers also may consider another option—obtaining Actual Loss Sustained coverage (nomaximum limit) when available. Another must is Off Premises Utility cover- age to protect you when a covered peril to an offsite utility is the cause of the utility not being able to deliver services, thereby result- ing in a BI loss at your premises. Be sure to get overhead power line coverage included when available. Many companies will cover the loss of income caused by damage to a utility, but not for downed overhead lines. COVERED  continued on page 12