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Garage workshops warned of potential pitfalls of aggregators and underinsuance
Garage workshop owners have been warned about the potential pitfalls of using aggregator sites to source their cover online and how under insuring to obtain the desired level of premium could leave their business exposed.
That was the topic of conversation at Automechanika at the NEC Birmingham this week – the world’s leading exhibition for the automotive aftermarket and supply chain – where Managing Director of Motor Trade at Arthur J. Gallagher, Leon Bosch, led a seminar on 'Effective Insurance Policies for Garage Workshops', in partnership with The Parts Alliance.
Leon discussed how the rise of price comparison and aggregator sites over the past few years may be driving a mindset of premium over policy, which is now transferring into the commercial market too.
The flexibility these sites give businesses to obtain and tailor-make policies to suit their needs, means that levels of cover can be reduced or entire sections of cover removed to bring the premium down to suit the company’s budget. Also, whilst these sites may look like they provide a comprehensive selection of quotes, from a long list of insurers, in actual fact, they are not the full market of providers available, so garage workshop owners may be missing out.
The problem with this approach to renewal is that by choosing premium over the correct policy, garages could be compromising on their level of protection, and with no one there to warn them this could leave them underinsured. The only time garages would realise there’s an issue is when they make a claim and find out that they're not covered, or the settlement is less than expected, which could place businesses in a difficult financial position.
Delegates were given some tips on the correct way to ensure they get an appropriate policy:
- Deal with brokers that know the industry, as they are more likely to understand the issues affecting your business, and the level of cover you need. They can then negotiate with providers to get you the best deal, which still leaves your business completely protected.
- Take time to know where your risks lie. You know your business best and by considering what the risks are to your business, it means you can brief your broker appropriately.
- Disclose all material facts upfront, whether they are previous claims or even CCJs. By disclosing this information, you will ensure that when the time comes to make a claim, there will be less risk of a policy being voided or a claim refused.
- Don’t compromise on cover or reduce sums insured, as this will leave your business exposed
- Don’t focus solely on the premium, because the most important thing is to safeguard your business and make sure you’re adequately covered.
- Question sums insured, endorsements and exclusions – essentially ask lots of questions, so you’re 100 per cent confident in the policy and provider recommended.
- Start your renewal process in good time. Investigating all the policies available takes some time, so for the broker to do the best job possible, it’s important to given them adequate time.
- Don’t involve too many brokers in the renewal process. Whilst you may think that some healthy competition will help you get the best policy at the lowest price, some insurers will refuse to quote to avoid getting into the awkward politics between the brokers.
- Ensure that you know the provider your broker has placed you with, so that when the time comes to claim, you’re confident they will be able to fund any claims in the long run.
- Look to join a garage network, such as Servicesure Autocentres, which is backed by The Parts Alliance. These associations are there to do the hard work for you – qualifying vendors – so you don’t have to.
If you’re a garage workshop and would like to find out more, please email Leon Bosch at Arthur J. Gallagher at email@example.com