Used Car Dealers with large inventory should always carry dealers open lot insurance as a part of their used car dealer insurance program.   This section of the garage policy is designed to protect your inventory from losses such as wind and hail as well as collision.  If you have a large inventory, especially one that fluctuates in value from time to time, then you should consider a twist to the dealers open lot coverage.  The twist is a form called the dealers blanket reporting form.

With the standard dealers open lot coverage, you must choose a coverage amount that reflects your highest inventory value at any given time during the policy period.   And of course, your premium is based on the amount of coverage that you choose.  If you purchase too little coverage, then you run the risk of having a loss that isn’t fully covered.  If you choose too high, then you might be buying more insurance than you need.  This is where the dealer’s blanket reporting form can help. 

When you use the reporting form on your policy, you must complete an inventory report once each month.  Now the procedures and the rules for this form may vary a bit from company to company.  For this example I will use the rules used by Auto Owners Insurance Company, one of our largest markets for used car dealer insurance.  To start this program the insurance company will want for you to base your original limit on the average inventory value for the previous 12 months.  If you are unsure of that number, then you can start with 75% of your current inventory.  

There are several strong advantages of this form over the dealers open lot fixed amount form.   First of all, as long as you complete and return your monthly reports on time, and as long as they are accurate, then you will have unlimited coverage.  This helps smooth out the peaks and valleys in your inventory.  Second of all, this form provides true blanket coverage.  So if you have more than one location it won’t matter as long as your inventory report each month has the total inventory for all locations combined.

While the dealer’s blanket reporting form is not for everyone since it requires a monthly inventory report to the insurance company, it can save you money and provide more seamless protection on your inventory if you have fluctuating inventory amounts or if you have multiple locations. 

Your average insurance agent will know very little about garage insurance in general and insuring used car dealers in particular.  It is very important that you find an independent insurance agent who specializes in used car dealers to help you.  At Clinard Insurance Group, in Winston Salem, NC, we insure over 250 used car dealers in North Carolina, South Carolina, Tennessee, Virginia and Georgia.  If we can help you with your garage insurance or any other policies for your used car business, please call us, toll free at 877-687-7557 or visit us on the web at www.TheAutoDealersHelper.com.

Painting Company Insurance plans should all include a workers compensation policy for your employees and subs,  unless of course you work alone and have no employees.  And if handled incorrectly,  work comp policies can tear a huge  hole in your cash flow.  For more information on how this can happen, please  read my blog on the audit trap.  So it is important to understand your cash flow process vis-à-vis your payroll.    What if you could time your workers compensation policy to match the slower cash flow and lower payroll times?

In fact you can.  With a little understood tool called pay as you go.  Now  you need to know that not every insurance company that insures painters can or will offer this feature, but if you can find one that does and their price is right, this can be a nice benefit for painters and painting companies. 

So how does it work?  Well, these plans vary some from company to company,  but the very best of them will send you an email or a mail reminder each month.   You then log on to their web site and enter your payroll totals for the past month.  The web site will then calculate your premium for that month and you can pay your bill on line right then and there with a credit card.  What this means for you is that now your workers compensation expense tracks your payroll with only a 30 day delay.  And since your revenue from jobs is always running just a bit behind your payroll costs, now your workers compensation expenses will more nearly track your revenue and this means you will have less wild swings in your monthly cash flow.

There are a few things to watch out for here.  First of all, there are some payroll service companies out there offering pay as you go workers compensation to go with their payroll service.  On the surface this sounds great but there is a problem with this approach.  One huge factor in your workers compensation insurance costs is your experience modification factor.  And you need to work proactively to protect that mod to keep future costs lower.  Companies that specialize in payroll services and sell work comp as a sideline are rarely as good at keeping claims costs low as companies whose prime mission is workers compensation insurance.  These dedicated work comp insurance companies by contrast, will often have nurses and case managers on staff to help reduce your overall claims costs.  And keeping your claims costs low will keep your rates low over time.  To learn more about this read my blog on protecting your experience mod.  In addition, if you purchase your workers compensation insurance through a payroll processing company, you will usually have only one choice in terms of the insurance company that handles it.  This is stripping you of your free market shopping tool as a way to reduce the overall costs of workers compensation insurance.  Instead, consider finding an independent insurance agent who represents many insurance companies, and more importantly, find one who specializes in insuring painting contractors so that you get the expertise that you need for your business.

One last thing to mention here is that the pay as you go feature offered by some companies is often only available to painters whose premium exceeds a certain level, often as high as $5000.  There are a few companies out there who can offer this feature at a much lower premium level, but you will need to find an agent who specializes in painters insurance to find them.

At Clinard Insurance Group, in Winston Salem, NC, we are the Painting Contractor Insurance Specialists.  We have companies that can write pay as you go workers compensation policies for painters with annual premiums as low as $1000.  If we can help you with any of your painters insurance policy questions, please call us, toll free at 877-687-7557 or visit us on line at our Painting contractors’ insurance program policy page.

Some of the source material for this article was drawn from other blog articles which can be found at www.InsuranceAnswerGuy.com.