Preparing for Your Dealership Insurance Renewal
I am often asked the question…’’How far in advance should I work on my Insurance renewal? Thirty days prior to renewal, sixty days, ninety days out?” My answer is always the same. Begin working on it as soon as you bind the current year!
Insurance is such a large expense that it needs (and deserves) to have year-round attention.
This means a constant and consistent review of claims, loss control policies and procedures.
Remember the RFP (insurance specifications)? This needs to be a living document that evolves as your dealership’s coverage requirements change. Make insurance a line item of discussion at monthly Management Meetings. Setting accountability standards and giving your Dealership the opportunity to participate in the available risk/reward programs is an essential part of controlling premium costs.
Armed with a solid Risk Management approach, you can begin discussions with the marketplace 6 months prior to renewal. Identify the available Brokers/Agents and Direct Writers and ask them to bring their Underwriters to the Dealership for a meeting or lunch. Put out the Welcome Mat for Loss Control Engineers and carrier Inspectors who can write favorable reports on your Dealership.
At the 120-day point, refine and update the RFP for dissemination to the interested parties.
Outline Management’s Response to claims over $ 25K and your reactive and proactive measures to prevent recurrences.
At the 90-day mark, ask your incumbent carrier to provide a renewal offer…noting that a good offer will allow the “partnership’’ to continue for another year. Carriers prefer to renewal accounts early…freeing up underwriters to work on new business. This is one of the strongest negotiation tools available.
If the incumbent is unwilling to provide acceptable renewal terms early, begin the process in earnest. All the available markets should be able to use the RFP and will require only ‘’updated’’ Loss Runs.
Set specific timelines, preferably 15 – 20 days prior to renewal, for all proposals to ensure you can adequately review coverages and terms. Carriers like to negotiate ‘’last minute’’ so remind them of the information provided early and request their ‘’best price’’ with the proposal.
Working on your insurance renewal is a process. Don’t wait until the last minute!
Carriers need time to assess and model risks…and, you need time to review and negotiate.
Watch for our next info blast…Exploring Options!