This story is the continuation of Monday’s “Into high gear.” To read the first part, click here.
Garage insurance
Garage insurance, which combines auto and general garage liability, covers liability associated with garage-type operations, such as repair shops, new and used car dealerships, motorcycle and RV dealers, and collision shops. Although garage insurance is crucial to these types of businesses, most retail agents and brokers have a limited knowledge of the product.
“Oftentimes we that find retail agents are either not comfortable with the product or they don’t understand it. It’s a hybrid form, and the specialization of that causes agents to shy away,” says Patricia Roth, senior vice president at
Worldwide Facilities. “That agent recognizes there is an exposure but doesn’t know exactly how to go about securing the coverage, what the nuances of the coverage are and how the pricing works.”
Due to similarities in verbiage, agents who are not specialists in the space often confuse garage liability insurance with garage keeper’s liability. Most retail agents don’t experience a large concentration of business in the garage space, so they don’t see the need to get educated or specialize. “We recommend that retail agents partner with a wholesaler who is willing to impart as much knowledge as possible,” Roth says. “We’ve recognized that the insurance community does not do a lot to educate brokers and agents on this matter, and there are no CE classes available, so we find ourselves trying to educate retail agents on garage liability.”
For agents who want to expand their garage business, Roth advises they first get informed about the major players in the space. Taking this step allows retail agents to be fully aware of the business they’re able to go after before they make any commitments.
“It’s highly specialized, even in terms of the market appetite and what can fit into the program, so if you’re targeting this space, it’s important to have a player in the class,” Roth says. “Underwriters are more than happy to partner and explain the coverages, so agents can gain a lot of information that way.”
Embracing change
Expected to be a common sight on our roads in the next decade, autonomous vehicles represent the biggest change in automotive manufacturing for a long time. But what sort of challenges and opportunities will the introduction of self-driving cars create for brokers and agents?
“Autonomous vehicles will change auto insurance in many different ways,” says Dan Crew, vice president of underwriting at EMC Insurance Companies. “Liability related to the autonomous vehicle may be covered by a general liability policy rather than an auto policy, and in the long run, the frequency and severity of auto accidents may decrease as a result of automated braking and lane assist systems.”
Crew believes advances in technology will continue to change the landscape of the commercial auto space in the long-term. “As with any new market, changes will start slowly, with market-leading insurance companies and business entities, but the pace will likely increase as older vehicles are replaced and the cost of these technologies becomes more affordable,” he says.
“Agents and brokers who embrace this new technology will have an opportunity to guide their clients through this transition, which will create opportunities for them to expand their client base and grow their business.” Due to the current flux in the market, an agent or broker who sells solely on price cannot expect to see significant growth in their book. Instead, brokers and agents should provide clients with critical risk management techniques and educate them on loss control safety features, Crew advises. Those who provide that added service have a good chance to become leaders in this space. “Agents and brokers who become leaders in commercial auto will have opportunities to provide expertise and critical risk management techniques to clients as the market struggles with profitability and new technologies change the way auto insurance is being underwritten,” he says.
