Lowering insurance premiums
Summary: In this installment, Professional Carwashing & Detailing® asked Scott Brothers, president and CEO of The Insurancenter, to answer a question about how to lower a wash site's insurance premiums, submitted by an anonymous carwash owner.
Q: Is there any way for a carwash owner to significantly lower his/her annual insurance premiums?
Scott Brothers: If lowering your insurance premiums were easy, everyone would do it. Some of these suggestions may sound too simple. However, try them — they will help keep your insurance premiums as low as possible.Important questions
1. Have you reviewed your storage methods? The more you can reduce the exposure to loss, the lower your fire rate will be.
Be sure to point out to your agent if, for example, you have a separate storage building for extra inventory.
The separation of flammables by clear space reduces the chance that a fire could spread quickly from one section of the property to another. If you don't have a separate storage building, you may want to investigate the cost of adding one.
2. What do you do with oily rags and debris? Be sure you have available storage containers — that you've properly identified — placed away from the building to create a fire break to reduce unnecessarily exposing your property to accidental fire damage.
Employees should be aware of how to use these containers properly. The best equipment and plans will not work if you do not make it clear to employees that you are serious about proper use.
3. When was the last time you asked your local fire department to inspect your premises for possible fire hazards?
The fire department will check to make sure there are fire extinguishers properly placed throughout the premises and that these fire extinguishers have been charged. They will let you know if there are special precautions you should take to reduce fire hazards.
Invite your insurance agent over to inspect your premises. Let your agent know when you have an electrician or plumber update your wiring or plumbing. Especially if your building is over 10-years-old and is in better than average condition.
When your agent can report that you have recently updated wiring to reduce the fire hazard, or put on a new roof to reduce windstorm hazards, or updated your plumbing to reduce the likelihood of water damage; this allows the insurance company underwriter to apply premium credits to reward you for your diligence.
Be sure employees are trained to do their job in a safe manner, and that your agent has a copy of any employee handbooks issued.
When you have high caliber employees who are trained to do their job safely, your insurance company should be aware of your efforts.
General liability claims are less likely to occur in quality organizations. With proper documentation, and an above average work place, your insurance company underwriter may be able to credit your rate.
Invest in safety
Be sure your premises are well lit: Don't leave a hiding place available for possible criminal activity. Check into security devices, which may include something as obvious as putting bars on your windows or installing deadbolt locks.
You may also want to invest in equipment such as a security camera system. These are not nearly as expensive as they once were and can not only serve as prevention devices but also can provide information to capture anyone who does enter your premises without permission.
Keep your equipment in good condition. Even new equipment, if it is not properly maintained, can malfunction. Be sure all equipment, whether exposed to the general public or not, is in safe working order.
Remember your employees are your most valuable assets and you need to do your best to protect them from injury.
For car-care businesses in particular, one of the concerns is how much of the location is open to the public.
If you restrict the public to a small, safe entrance area, rather than allowing them to roam throughout the shop, it may allow a credit in the price for your insurance.
Such things as years of experience in successfully running a business should be reported to an insurance agent. The quality of service and a strong financial position may affect the pricing structure used to provide insurance coverage.
Be sure to let the insurance agent or insurance company know extra steps have been taken to lower the likelihood that the business will experience a loss. Communication with your agent is a key to keeping your insurance premiums as low as possible.
- Keep your safety program alive and build on it.
- Keep an eye on the hazards existing within your operation.
- Be sure employees are not engaging in hazardous operations.
Stay in compliance with your own safety regulations by putting your program in writing and making sure it is enforced.
The ups and downs
Bottom line, you can help control your insurance costs by implementing some of these simple steps.
Insurance costs will still go up and down due to general market conditions. However, when insurance costs are increasing, you can help minimize your own increases.
And, when insurance costs are decreasing, you can maximize the credits applied to your insurance program. Common sense and communication, as with most things, are still the most valuable things you can use to benefit your business and keep your insurance premiums in check.
Scott Brothers is the president and CEO of Joplin, MO-based The Insurancenter. Since 1986, The Insurancenter has been insuring the car-care industry and is the leading writer of insurance for the industry nationwide.