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EXECUTIVE DIRECTOR’S MESSAGE: SCULPTING LEGISLATION FOR OUR INDUSTRY
Sculpting Legislation for Our Industry
Dealer input is critical
BY BRIAN DANSEL, EXECUTIVE DIRECTOR
-THEODORE ROOSEVELT
As you have heard me talk about in these articles as well as at chapter meetings, WSIADA needs to have more of a role in developing legislation aimed at helping our industry. Such is the case with the pre-filed Senate Bill 5495, which would prohibit scrap dealers from purchasing catalytic converters except from commercial enterprises and vehicle owners. Scrap dealers who knowingly purchase or receive stolen catalytic converters would face misdemeanor charges.
Similar laws are being passed in other states as catalytic converter thefts sweep the country. Senator Jeff Wilson (R-Longview), the bill’s author, said he modeled his legislation after a similar law that takes effect in Oregon next month, out of concern that it will drive thieves north of the border.
Wilson’s bill, introduced for consideration during the 2022 legislative session, also requires scrap metal dealers to confirm ownership when catalytic converters are resold, and maintain records of vehicle identification numbers. Cash payments could not be made on the spot and would have to be delayed at least five days.
The WSIADA Board spoke about Senate Bill 5495 at their last board meeting and decided to come out in favor of the bill. I will work with our Lobbyist to provide as timely an update as possible, but what would help us out would be to hear from you all regarding converter theft in your area. We need hard (and correct) numbers to provide both Senator Wilson’s team as well as our lobbyist so that we have a better shot at moving this bill forward.
Here is a link to the bill as it currently reads: lawfilesext.leg. wa.gov/biennium/2019-20/Pdf/Bills/Senate%20Bills/5495. pdf?q=20220106141803
Please give it a read and let me know your thoughts. As always, we know the best answers come from you all who face these issues on a daily basis. Here is to a great 2022—and let’s hope for a legislative victory out of the gates.
Sincerely, Brian
EVENTS CALENDAR
TITLE WORKSHOPS
(Virtual Meetings) February 16 – 9am-12pm
wsiada.com/title/February2022
March 16 – 9am-12pm wsiada.com/title/March2022
CHAPTER MEETINGS
March 22 – Vancouver
6pm – 9pm, Hilton Vancouver 301 W 6th Street Vancouver 98660
March 29 – Tri-Cities
7pm – 10pm, Clover Island Inn 435 N Clover Island Drive Kennewick 99336
March 30 – Yakima
7:30am – 10am, Hilton Garden Inn 401 E Yakima Avenue Yakima 98901
April 5 – South Sound
7:30am – 10am, Griot’s Garage 3333 S 38th Street Tacoma 98409
April 12 – North Sound
7pm – 10pm, Courtyard Seattle-Kirkland 11215 NE 124th Street Kirkland 98034
April 13 – North Cascade
7:30am – 10am, Drager’s International 1645 Walton Drive Burlington 98223
April 19 – Spokane
6pm – 9pm, Hilton Garden Inn 9015 W Highway 2 Spokane 99224
ANNUAL CONVENTION
June 13 – 15th
Campbell’s Resort at Lake Chelan 104 W Woodin Avenue Chelan 98816
Is Your Dealership Underinsured in Today’s Economy?
A million dollars used to be the gold standard. If I could only be a millionaire I’d be set!….or would I? As Dr. Evil learned several years ago, it seems a million dollars just isn’t the same as it used to be.
In early January, Apple became the first public company in history to hit a $3 trillion market cap. A trillion is equal to one million million – and they have three of them! Read the news lately? It seems every day we hear of the government spending a trillion here and a trillion there like its nothing.
So how does this have any impact on insurance? I mean, it’s not like anyone is ever going to sue for a trillion dollars, right? Rest assured they probably won’t, or at least not with any success, however, the constant chatter including these large numbers has changed the mindset of the litigious to the point where a million dollars no longer seems as big of a settlement as it once was – and our lawyer friends know it. If you’ve been needing an excuse to review your dealers/garage insurance policy and make sure it is in line with 2022 moving forward this may be the time.
Over the years when placing insurance for auto dealerships, we have found most dealers choose a liability limit ranging from $100,000 on up to a $1 million. The decision is usually made based on either cost, a recommendation by the agent, a landlord requirement, or because it’s the only limit offered by the carrier. What this means is in the event of a claim filed against the dealership, the insurance available is equal to the chosen limit with the highest amount available on a garage policy usually up to $1 million.
So, what happens if someone sues for more than a million? This is where an Excess Liability Insurance policy comes into play.
Excess Liability insurance is a type of policy that provides limits above the underlying liability policy. It does not broaden the stated coverage; it provides higher limits on top of the original policy. The primary purpose of Excess Liability insurance is to offer an added layer of protection in case the underlying insurance is exhausted of all possible resources.
You may have heard the term Umbrella coverage before. An Umbrella and an Excess policy are similar yet not the same. Although an Umbrella is a type of excess policy, it is designed to cover multiple policies and is not available for all commercial risks. Because a garage insurance policy is made of multiple pieces, the main exposure being the liability to another party, the focus is to increase that liability limit. This is done by adding an Excess Liability policy.
Here’s how it works; when a claim is reported to an insurance company, the first policy that will cover all financial losses and damages is the underlying policy (your garage policy). If the claim exceeds the limits of the underlying policy, the Excess Liability policy kicks in, picking up the remaining costs that were not covered by the underlying insurance. To better understand, here’s an example scenario:
Another driver is injured due to an accident caused by someone test driving one of your vehicles. The injured party files a claim against you, and the court decides that you are responsible for the incident. The injured party wants a $1,500,000 settlement, but your Garage Liability insurance has policy limits of up to $1,000,000. The underlying policy covers the first million and the Excess Liability covers the remaining $500,000. Without it, you would have to somehow figure out how to pay that $500k out of pocket.
How much? The cost of an excess liability policy varies. A $1 million excess can range from under $1000 to several thousand, depending on your underlying exposure, number of staff, plates, and other factors.
Unsure if an excess policy is a good fit for your dealership? A quick calculation is to determine if the assets of your business exceed your current liability limits. If they do, you should consider the added protection of an excess policy. Contact your insurance agent and start the discussion this month. n
Todd Shepard is the founder of Shepard & Shepard Insurance Solutions and a regular contributor to the Front Row. For a professional review of your insurance policy or quote call 855-396-0488 or visit www. shepquote.com
