Program spotlight: Automotive Recyclers insurance
Have you ever bought a “one-size-fits-all” garment, only to find it’s not true – it didn’t fit well at all? That’s the fallacy of trying to sell your automotive recycler clients a BOP (business owners policy) – it just doesn’t fit. That’s why you as a producer should consider adding Arrowhead’s Automotive Recyclers insurance program to your portfolio. It helps you cast a wider net for commercial clients.
“All too often, when agents call on automotive recyclers, rebuilders or dismantlers, they’re not fully aware of the specialized coverages that are needed,” says Debbie Winterowd, CIC and senior program manager for our Automotive Aftermarket Recyclers Program. “Arrowhead, through carrier Zurich, offers specific coverage designed for a recycler.
“A traditional BOP doesn’t address many of the needs of a recycler,” she added. “Some of our endorsements will address the exposures that only an auto recycler will need.”
One example she provided is an endorsement that covers used parts. “If the insured’s building burns to the ground, with stock inside (his stock being used parts) – how do you value used parts? Arrowhead’s program pays 50 percent of the insured’s retail price: that’s how we determine value. Of course, new parts are replaced at replacement costs.”
What are the target markets for this program?
The Automotive Recyclers insurance program offers coverage to recyclers, rebuilders and dismantlers. What’s a dismantler, you ask? The traditional automotive dismantler disassembles and then and puts all used parts on a shelf for sale. Some recyclers may dismantle, but also rebuild transmissions or engines. Those businesses are covered. “We stay away from any rebuilt parts that include steering or braking components,” Winterowd explained.
“U-pull-it” yards, where the customer goes into the yard, find the part(s) he needs and returns to the office to pay, can also be covered. The customer must simply sign a liability waiver before entering the yard.
What’s included in the Automotive Recyclers insurance package?
Property: building coverage, business personal property, including inside stock and equipment and stock in the open. Also included are
- Equipment breakdown protection
- Property basket plus endorsement (demolition expenses, additional coverage for increased costs of construction, pollutant clean-up and renewal, and select crime coverages)
- Business interruption / extra expense
General Liability: third-party product recall liability and employee benefits liability, along with
- Injury occurring from a product sold or service provided
- Coverage for vacant land and leased properties
Crime: employee dishonesty, forgery/alteration and theft (in and out).
Commercial Auto: liability, physical damage and garagekeepers liability (direct or legal liability basis).
Inland marine: mobile equipment and cargo liability.
Commercial Umbrella: limits up to $5 million.
Related: Auto recycler fire risks
What makes the Automotive Recyclers insurance program attractive to producers?
This Zurich program (formerly Universal Underwriters) has been around for a long time, she said, and it enjoys a well-deserved excellent reputation. This makes the program an easy sell to prospects. Commissions on new business is 12 percent, attractive to producers. Third, Arrowhead has provided a downloadable sellsheet that producers can use in presentations to new clients. Just download, add your contact information and print (or email).
What are the common questions you get from producers?
Winterowd named these top questions that her team is asked most often:
- Will we offer coverage for a tow truck if the insured has a truck? Yes. Towing just can’t be the primary business. (Note: Arrowhead offers a separate Towing Program.)
- Will we cover a used auto inventory for resale? Yes. Again, it can’t be the primary business.
- Do we cover other types of recycling? Yes, but it must be an incidental part of the main recyclers business.
- How long does a recycler have to have been in business to be considered? They must have three years of industry experience.
What advice do you give to brokers?
“Always offer the umbrella policy – half of our customers have them,” Winterowd explained. “Traditionally we’re very competitive on our umbrella premiums, with limits up to $5 million. We will provide excess coverage over the Zurich package policy for GL and auto liability coverage. In today’s environment, it’s rare that anyone would not have at least a $1 million umbrella. In this litigious day and age, very agent should be offering their clients umbrella coverage – there’s just too much risk of a lawsuit out there.”
Learn more about this Automotive Recyclers Program.
Not yet an Arrowhead producer? Start here.