Premium Reduction Guide. California Automobile Repair Shops

Transcription

1 April 2012 Premium Reduction Guide California Automobile Repair Shops 5 Minutes 20% Lower Costs No sales people to bother you 2012 rates Pay the lowest rates in California (858)

2 How to use the Premium Reduction Guide Step 1: Compare your current rates to the Best Rates shown on the following page. Step 2: Contact your current agent and ask them what your rates will be for this year s renewal. Tell them you would expect your rates to meet or beat the rates in the Premium Reduction Guide. Step 3: If your broker or agent can t produce rates that match the rates shown in the Premium Reduction Guide, Insurance Dragon can refer you to a broker who will. All information provided in this report and any documents ancillary thereto ("Report") are provided for information purposes only. Although the information found in this Report is believed to be reliable, no warranty, expressed or implied, is made regarding the accuracy, adequacy, completeness, legality, reliability, or suitability of any information, either isolated or in the aggregate. All information is provided "as is." Changes may be periodically made to the information contained in this Report. No notice is required with respect to any changes. If you find any errors or omissions, we encourage you to report them by to: administration@insurancedragon.com. Under no circumstances will Dragon Services, Inc., or its directors, officers, agents, contractors, employees or assigns be liable for any direct, consequential, indirect, special or punitive damages whatsoever arising out of your access to or use of this Report. (858)

3 Section One Insurance Companies and the Best Rates What are the lowest possible Garage Liability rates in California? Now we provide the answer. Insurance Dragon is a consulting firm. We are not insurance brokers, nor do we sell insurance. Industry Report: Auto Repair California Garage Liability Best Possible Final Net Rates (After all credits Does not include Garage Keepers Legal) Garage Liability Best Final Rate (Net Rate) Shops with Annual Payroll Under $500,000 Shops with Annual Payroll Over $500,000 Rate Per Mechanic or $600 - $700 $500 Rate per $1,000 of Sales $ $2.80 The rates above are based on a typical auto repair shop, as described here: o Excellent Loss Experience for the past 4 years o General Auto Repair or Quick Lube Shop o Good employee hiring practices; low turnover, relative to the rest of the industry o Good safety programs in place and followed o Proper procedures in place for disposing of or recycling hazardous materials o Limits - $1.000,000 Each Occurrence / Deductible - $1,000 Property Damage Only If your business matches the parameters we described and you are paying more than the listed rates, call us at (858) Insurance Dragon can help you find out why and let you know how you can lower your rates. Your Individual Rates may vary if your exposures are different from those listed. For example, if you have had a number of claims, you might not be able to realize the market-best rates listed. Insurance Dragon can produce a Premium Reduction Guide for your particular business. Our rates for client-specific Premium Reduction Guides vary depending on the size of business. (858)

4 Section One Insurance Companies and the Best Rates Insurance Companies Actively Writing Garage Liability for Auto Repair Consistently Most Competitive Regularly Most Competitive Occasionally Most Competitive Garage Liability for Auto Repair Travelers Allied Farmers Oregon Mutual Philadelphia Sentry CNA Crusader Hartford Golden Eagle Markel Sequoia Note: A new market has recently launched Sea Fire Ins (Chubb) but we have not received any feedback regarding their competitiveness yet. Access to Sea Fire is limited to certain brokers, please call us. All insurance companies listed are rated A- IX or better by A.M. Best. For any particular business, any one of the insurance companies listed above might be the most competitive. Even those insurance companies listed as Occasionally Most Competitive can deliver the lowest price at times. Also, there may be other insurance companies that can write Garage Liability for auto repair shops. As we learn about other insurance companies writing auto repair, we will add their names to this report. Access points are critical! Having the wrong broker approach a competitive insurance company can result in no quote at all or a very poor quote. If you would like to know the name of a broker that has strong experience with auto repair shops and a large concentration of business with any of the listed insurance companies, please call us. (858) Research Techniques The Rates identified in the report reflect the Best Possible Rates in California, by line of coverage. The rates are projected based on the rating assumptions listed. Best Possible Pricing was identified after working with auto repair clients, after discussion with many brokers, and after review of our own internal pricing models and research tools. (The brokers we contacted are committed to delivering coverage at the pricing listed if given the chance to do so. These are real rates.) (858)

5 Section Two Tips on Lowering Your Premium The Business of Buying Business Insurance In our role as consultants, we have worked with clients in virtually every industry seeing the same issues over and over. Very Few Quotes: Businesses typically see only 2 or 3 quotes. There are many excellent brokers. Still, it has been very surprising to us how often our clients, in nearly every industry, tell us that they thought there were only 2 or 3 insurance companies that were interested in either their industry, or their particular business. The business owners believed that this was because of their prior losses, or a particular characteristic of their business. In our experience, there are many insurance companies interested in any particular business, no matter the industry or the loss history. Rates are Mysterious: Businesses have no independent benchmark to tell them if their current insurance pricing is close to the best possible pricing in California for their type of business. Premium Reduction Guide The Solution 1. Save Time: Businesses can avoid the time-consuming and frustrating process of shopping for insurance if their current rates approximate the market-best pricing shown. 2. Market Knowledge: For the first time, businesses can know if the most competitive insurance companies are quoting. 3. Pricing Knowledge: For the first time, businesses can know if their insurance rates approach the best possible rates from any broker and any insurance company in all of California. (858)

6 Section Two Tips on Lowering Your Premium Obtaining Good Quotes Insurance pricing is subjective and variable (no one knows what your future losses will be) so taking the wrong steps can result in higher premiums.. 1. Written Arguments: Since pricing is subjective, you need to make sure that every underwriter sees in writing, all of the arguments on why your company has lower hazards compared to other similar auto repair shops; in other words, why your company deserves lower pricing. From the Insurance Dragon website, you can download lists of many arguments that you and your broker can use in this manner. 2. Strong Application Package: Ask your broker to see a copy of the application and submission package sent to underwriters on your behalf, including the written arguments. The best brokers will be happy to show you their hard work on your behalf. Lum 3. Broker Choice: With insurance pricing being subjective, one particular broker may have a superior relationship with an underwriter that takes a fancy to your particular business. 4. Get Quotes Early InsuranceDragon.com has tips on how to do this. 5. Don t Share Numbers : If you have more than one broker bid, sharing a quote from one broker with another is selfdefeating and forces brokers to withhold quotes until the last minute. (Reference the Insurance Dragon website for tips on negotiating lower premiums.) Businesses are unaware that they overpay for insurance but we know that it happens around 80% of the time. (858)

7 Section Two Tips on Lowering Your Premium A Few Key Arguments to Lower Your Premium Following are questions typically not fully addressed in insurance applications. Answering these questions in detail can help lower your premiums: Customer Access you should confirm that you enforce a rule of not allowing customers in the shop area. Vehicle Sales - comment on the number and type of any used vehicles projected to be sold over the next twelve months. Written Safety Program outline how comprehensive and far reaching your safety program is. For more information on Safety Programs refer to: Cal/ OSHA Injury & Illness Prevention Program Hazardous Materials outline the procedures used to properly dispose of or recycle hazardous materials. There are other important questions to address with an insurance professional, but these are a few of the key issues for all auto repair shops. Remember, always tell the full and complete truth. Failure to do so can jeopardize coverage when you have a claim. (858)

8 Section Two Tips on Lowering Your Premium Claims Arguments If your business has experienced Garage Liability claims in the past, then you need to explain why your account is not likely to have similar claims in the future. This could have a significant impact on your Garage Liability premium. Here are some brief examples: You can obtain a free list of nearly 100 potential arguments at Dragon.com. Discontinued Operations The claim happened from our Used Vehicle sales and we no longer sell any vehicles. Safety Program The claim happened because we were not as rigid in fully enforcing our Safety Program. Since then, we have instituted a comprehensive safety plan and we now hold weekly safety meetings. This particular incident is talked about repeatedly and we certainly do not expect it to ever happen again. Employee Training One of the claims involved an employee that had just been hired. We now have an expanded formal training program that all new hires must complete before they can begin working. The claim in question could not happen today because of our change in the way we do the work. These reasons are just examples. You would need to tailor the argument to match your situation. (You or your broker can obtain a free list of nearly 100 potential arguments at This list can trigger discussions that can save you thousands of dollars in premium.). As a reminder, all arguments should be in writing, allowing you to easily update and use them in subsequent years; also, you can make certain every underwriter has the ability to justify the lowest possible pricing. (858)

9 Section Three How We Do It Premium Reduction Guides Coverage Summary/Quote Comparison One of the most difficult insurance challenges for businesses is comparing coverage proposals. Each broker uses a different proposal format, and in our experience, it is rare that a proposal addresses every possible issue regarding coverage, exclusions, and premium terms. We have developed a Coverage Summary/Quote Comparison to make the process easier for you. Simply send the following form to any broker that has a competitive bid that you are considering and ask the broker to complete the Quote Summary as part of their bid. Once completed, the Quote Summary will allow you to easily compare coverage with your current insurance in a side-by-side display, making an apples to apples comparison easy. Any significant differences in the terms of the quotes will be readily apparent. Our clients love using the Summary and we hope you will too. Please feel free to let us know if you have any questions. Insurance Dragon (858)