In the area of business insurance, the latest Marsh Global Insurance Market Index is showing that premiums in the last quarter of 2020 alone increased by as much as 35 per cent and many terms and conditions in policies have been changed or adjusted.
According to a statement by OurAuto Insurance: “The pandemic and ensuing economic consequences for businesses have drastically shifted dealership needs and highlighted the importance of finding the most appropriate protection for dealership properties and dealership operations”.
“More than ever, it is crucial for dealers to assess and compare their insurance policies to ensure that they adequately meet their dealership’s risk requirements,” the statement said.
“Challenging conditions continue to exist across many parts of the insurance marketplace, affecting dealerships of all sizes.
“Insurance premiums are on the rise, with pricing in the overall Pacific insurance market increasing 35 per cent over the past quarter of 2020.
“The most notable area of premium increases was property, with pricing increasing 31 per cent due to the substantial catastrophe losses the Australian market faced in 2020.”
The report said this led to “a shift in focus for insurers” which have looked at additional coverage restrictions in policies and altered wording to alleviate the pricing increases.
It also said that general liability insurance has also fluctuated significantly, with prices rising 15 per cent. This saw the largest year-on-year increase since 2012. The sector was considerably impacted by the COVID-19 pandemic and bushfires.
The OurAuto Insurance statement said that “as a result of rising insurance premiums, many car dealers are taking on more risk themselves to reduce the impact that premium increases have on their dealerships”.
Dealers were, for example, purchasing hail nets to protect their cars from weather damage.
Five tips for selecting the right dealership insurance policy
In the statement to GoAutoNews Premium, OurAuto Insurance said that choosing the right policy was a complex process and that there were many factors to consider when deciding on the right cover for a dealership.
The company put together five tips for dealers to use when comparing insurance policies and ensuring the insurance being arranged is best-suited for the dealership’s needs and risk appetite.
- Start your renewal process early
The past year has been a powerful demonstration of how critical it is for dealerships to be protected against a multitude of risks.
“We suggest starting early when considering what cover is right to protect your dealership and ensure you allow both yourself and your broker adequate time to assess your current insurance arrangements.”
- Understand your risk appetite
It is important to assess your dealership’s risk appetite or the maximum amount of risk your dealership is prepared to accept to attain its objectives. It said Marsh’s OurAuto Insurance team can work with dealers to help them understand and guide them to find the right policy to match the dealership’s risk needs.
- Make sure the cover level that is chosen is suitable for your dealership
Not all policies are the same, so it is crucial that dealers thoroughly review each policy’s details when comparing to ensure they choose one that is adequate for their dealership.
Key things to pay attention to include:
- Limit of liability
- Don’t compare insurance solely on premium
Although consideration of the price of the premium is important when comparing different policies, OurAuto Insurance suggests carrying out a side-by-side comparison of all available options before coming to a decision.
“Just as your customers deliberate on all available features before purchasing a car, so should you when considering all components of each policy. You want to make sure you drive away with the right deal,” the OurAuto Insurance statement to GoAutoNews Premium said.
“Insurance providers can base a policy’s premium on the risks they take on. Having a high number of exclusions can reduce these risks, which should result in a lower premium.”
- Work with brokers that ‘get’ your business
“Choosing the right cover for a dealership can be overwhelming. Working with a broker like Marsh as part of OurAuto Insurance, which understands dealerships, can help save time and money, assess dealership risks and ensure that the insurance policy is fit for purpose.”
Marsh’s OurAuto Insurance team says it will also provide advocacy support in the event of a claim.
The team said that finding a trusted, experienced insurance broker will benefit dealerships in the long run by ensuring they achieve an outcome that optimally suits their insurance needs.”
Note: OurAuto Insurance, is an arrangement between VACC and Marsh, the world’s leading insurance broker. OurAuto Insurance specialises in tailored insurance products designed to address key risks that are unique to the Australian automotive industry. It is the endorsed insurance broker for VACC.
This article contains general information and does not take into account your individual objectives, financial situation or needs. For full details of the terms, conditions and limitations of the covers, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh Advantage Insurance on request. Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238369) arranges the insurance and is not the insurer. The Victorian Automobile Chamber of Commerce (ABN 63 009 478 209) receives a financial benefit when an insurance policy is arranged by Marsh for a VACC member. LCPA 21/057
By John Mellor