Auto dealers and auto repair and body shops require specialized coverage to protect against their operational exposures, and agents who don't specialize in this type of business may be apprehensive about marketing to this group. However, having the right partnerships with insurance professionals and auto industry associations can help you add this niche market to your book of business.

1. Learn the Basics: Auto Dealers 101

Most carriers today have adopted ISO's Auto Dealers coverage form, which combines the protection provided by commercial general liability and auto policies. An auto dealers policy can be designed to include the following:

  • Property damage and bodily injury liability covers possible damage from lot and garage-related operations.
  • Garagekeepers covers damage to customers' autos and property.
  • Garage-owned autos covers damage to garage-owned autos on the lot or stored.
  • Owned autos provides protection for claims arising out of ownership.
  • Hired autos protects vehicles you and your employee rent or borrow for business purposes.
  • Non-owned autos covers partners, employees or members of households using personal vehicles for the business or personal affairs.
  • Temporary substitute autos protects owned autos in case they are disabled and the insured must use a temporary vehicle.
  • Newly acquired autos protects new or additional autos acquired during the policy period.

2. Partner Up

So, how to learn the ropes? Your agency can get up to speed in navigating coverages designed for auto dealers and garage service operations by working with an experienced insurance partner. It may be another retail agent who is not a competitor of yours who knows the industry, speaks its language and can help to distinguish your agency in a specific territory.

You can also partner with a wholesaler whose underwriters possess deep-dive garage experience and can help you get difficult accounts written when others can't. In addition, the garage insurance market for auto dealers/service operations over the last few years has firmed, characterized by higher rates and greater underwriting scrutiny.

"Three major markets no longer write garage coverage due to years of losses and rate inadequacy," says Angie Powell, CIC, AAI, RPS area vice president Transportation/Transportation manager. "As a result, the remaining markets have undergone both a rate and underwriting correction."

It's important, therefore, to ensure you have market access when going after these types of accounts as well as the knowledge of how to lower exposure in order to achieve competitive rates.

"For example, auto dealers will often include family members' personal autos on their auto dealers policy, which is not only more expensive than a personal auto policy but also provides narrower coverage. You can help clients lower their exposure by looking at options to transfer their risks and improve their auto dealers policy rates," explains Powell.

In addition to partnering with an experienced wholesaler, align your agency with an industry association in your state whose mission is to advocate for and promote the interests of dealerships, in addition to providing added-value member benefits. You may be able to establish a long-term relationship with a state or county association as a preferred insurance agency for members, particularly if you have market access for a wide range of auto dealerships. Expand your prospecting network by attending industry events — in-person or virtually — and offer to conduct a webinar to show how members can better protect their assets.

3. Energize Your Marketing Efforts

Step up your marketing program by targeting auto dealers and repair shops in your area. Consider using email software like Constant Contact, HubSpot, Mailchimp or ActiveCampaign to target this niche market. Create emails that discuss the pain points prospects are experiencing and the solutions you offer to address these pain points, such as insurance markets, competitive rates and responsive service.

"Auto dealers are always ready to shop around for better insurance rates," Powell notes.

And don't forget about direct mail. You can use fliers and other marketing material provided by a wholesaler and white label them with your agency brand or create your own fliers featuring the coverage and services you provide.

Cold calling is an option as well. Buy a targeted list of auto dealers and repair shops in specific ZIP codes. Speak with the insurance-buying decision maker and discuss your expertise and how you can help, particularly in today's challenging insurance market. In today's environment, so much business is conducted by phone and online.

When submitting business, Powell recommends sending a complete application so that an underwriter can provide quick turnaround.

"We prefer receiving a garage application, as it contains all the information needed to provide a quote," says Powell. "A complete application will help determine which market offers the best fit for an account in terms of coverage and price."

Please visit our Car Dealership and Repair Garage Insurance for more information.

Contributor Information