AmWINS parks auto dealers’ fears with DealerGuard insurance program

They have millions of dollars’ worth of assets sitting on their lots

AmWINS parks auto dealers’ fears with DealerGuard insurance program

Programs

By Bethan Moorcraft

The United States has one of the most prolific automotive markets in the world. According to Select USA, US light-vehicle sales reached 17.1 million units in 2017, with sales surpassing 17 million for the third straight year. The US is the second-largest market in the world for vehicle sales and production, selling through almost 16,800 franchised auto dealers as well as a large swathe of independent dealers and associations.  

With millions of dollars’ worth of assets sitting on their lots, auto dealers face considerable exposures. One flash flood or freak hail storm on an open lot can result in enormous damage, which is why specialized risk transfer and management is key.

There are a number of auto dealership insurance programs in the marketplace. AmWINS Program Underwriters has been writing DealerGuard, a comprehensive dealer’s open lot and garage insurance program for over 30 years. The program is designed for franchised auto, truck and RV dealers as well as large independent auto dealers, associations, and finance company floorplans. 

Through DealerGuard, insureds can get dealer’s open lot coverage, which essentially protects against physical damage to their vehicles, as well as a comprehensive garage package, including garage keepers’ liability, broad dealer errors & omissions coverages, property coverage, crime coverages and umbrella liability.

“Common losses for auto dealers can be caused by natural catastrophes, by floods or by hail storms. Theft of automobiles and test-drive collisions are also losses that sometimes crop up,” said James Kelley, senior vice president, underwriting officer at AmWINS Program Underwriters. “As a program administrator, our job is to give an underwriting return on profit to the carrier, which means we’re very selective and strict with our underwriting discipline.

“When we underwrite an auto dealer, we look at where the lot sits in a flood zone or a flash flood zone and we assess its hail risk score to determine what the exact exposures are and what terms and conditions we would want to underwrite to. If we’re looking at a state with an extremely high hail score, we may choose not to underwrite that account, or we may impose higher deductibles and limits. It’s all about underwriting discipline when it comes to success in the program administration business.”

Underwriting discipline is much easier to achieve if you have the right expertise behind the wheel, according to Kelley. He described DealerGuard as “really unique” because of the breadth and depth of the team’s expertise. As well as having superior underwriting, the DealerGuard program also handles claims internally for open lot losses. Kelley added: “Knowing how to handle and adjudicate the claims in a timely and efficient fashion helps to mitigate the cost of the claims, which is also important to our carrier partners.”

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