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Business Operations

Eight ways to better insure your car care business

March 08, 2011
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1. Double-check your policy.
According to Jennifer Horne of the Franklin Insurance Agency, a good way for an operator to decrease insurance costs is to make sure that his building coverage and business personal property are correct. For example: The automatic wash equipment or the vending that is built into the building is building coverage. The rate for the building coverage is better than the rate for business personal property.

2. Clean up the floors.
Horne suggested operators consider heating their bay floors in order to reduce the opportunity for slips and falls. “It is also important to keep the ice and build up clear from the vending areas,” Horne pointed out. Scott Brothers, president and CEO of Joplin, Missouri-based The Insurancenter, added that operators should also invest in several high-quality entrance pads and change them often, especially in adverse weather. “Also, keep careful watch and clean up any excess water in all areas as soon as possible,” he suggested.

3. Wear a name tag.
Horne said some business owners don’t realize they should have their policy listed with the corporation, LLC or doing-business name. It is also important to make sure that you have all of your additional insured correct. For example, Car Wash Inc DBA Car Wash, if there is a claim and suit papers are brought and Car Wash 1 is named, there might be a coverage issue. The named insured is one of the most of important items on an insurance policy.

4. Keep up the cash flow.
According to Brothers, more businesses fail to reopen after a property loss because they have little or no coverage for Business Income and Extra Expense than having inadequate coverage to repair or replace the damaged property. “Check with your agent and make sure you have enough business income,” Brothers suggested. “If you are already concerned about making ends meet, what if you had no income and no insurance (or inadequate insurance) to assure a positive cash flow.”

5. Keep an eye on things.
Cameras systems help prevent loss, according to Horne. If a customer would come in and say the automatic did damage, often you can look through the video. It also is helpful if there is damage done to the building and the person drives away, often a description and the license plate can be obtained.

6. Avoid costly mistakes when filing a claim.
Brothers said most insurance policies include conditions. “For example, claims are to be reported as soon as possible, care is to be taken to avoid further damage to property after a loss, theft losses must be reported to the authorities, etc.,” he explained. “Most of these are common sense issues but failure to comply with the conditions will result in delays in processing and maybe denial of payment for losses.”

7. Review your deductible.
Brothers recommended that carwash operators check their deductible on property insurance. “The higher the deductible, the lower the premium,” Brothers said. “Be certain, however, you are not accepting a deductible that would put you into financial distress if you have a loss or worse yet, more than one loss in a policy period.”

8. Get organized.
Brothers advised all carwash operators to carefully record claim numbers, adjuster names, and contact phone numbers to improve response time when checking on claim status. “Property losses will usually require an inventory of damaged items and proof of purchase,” Brothers explained. “It is wise to make a regular review of your asset values and keep this information in a safe place away from the insured location.” Some cost effective methods of doing this are as simple as taking your video camera and walking around to make a visual record of what you have at your insured location, he added, and any newly acquired property should be documented by keeping a copy of the receipt as proof of purchase.