Zurich Insurance made historic news by announcing it will non-renew certain types of dealerships in Florida and other states across the United States.
A Zurich Insurance spokesperson announced, “We are reshaping our auto dealer P&C portfolio to proactively address persistent underperformance due to the continued volatility associated with large and catastrophic hail losses, combined with overall profitability results”.
She continued to add, “We continue to offer P&C to all our large mega dealer customers nationwide and many of our franchise dealers”.
So, the question remains, what is a “Mega Dealership”? From our understanding, Zurich Insurance is referring to dealerships that have 200+ employees. This leaves the mid to small franchised and non-franchised dealerships scrambling to find coverage for their dealerships.
President of Barbee Jackson Insurance, Craig Barbee in response to this news commented, “Zurich Insurance is a massive player in Dealership Insurance in Florida. Florida is a unique market due to the potential losses from hurricanes, many dealership insurance carriers will cover for losses resulting from theft, auto accidents, etc., but will not cover losses resulting from wind, hail, or flood.”
The largest potential loss for any dealership operating in Florida is hurricane related losses. Many dealerships carry $2 million plus of inventory that need to be insured from losses resulting from such storm related activity.
The question then remains; Where do these dealerships that are being non-renewed find new coverage?
Craig Barbee added, “We are seeing a lot of activity within our Garage Insurance Division. We are able to provide the same coverage levels as Zurich when it comes down to wind related losses. The dealerships that are being affected by this non-renewal notice are able to get new insurance through many of our carriers.”
National Oceanic and Atmospheric Administration (NOAA) reported that in 2017 weather related damage toped $306.2 billion. With the growing concerns of losses, insurance carriers will continue to exit the dealership market in an effort to control losses. As certain carriers exit, other carriers will enter to fill the void.
Craig Barbee finished by saying, “Now, more than ever, it is important for dealership owners to work with insurance agencies that specialize in Dealership Insurance. Most retail agencies do not understand the coverage options and needs of Dealerships. They just don’t have the expertise to deal with this type of business coverage.”
When looking for dealership insurance know the right questions to ask. Krystal Jackson, Vice President and Director of the Garage Division for Barbee Jackson Insurance recently published a blog “Auto Dealership Non-Renewal, What to do Now?”