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Is it time for auto dealerships to re-evaluate their inventory value?
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Help protect your auto dealership clients from the potential of co-insurance penalties by reviewing their inventory values before the next storm. The recent claims described below highlight two auto dealerships who recently incurred hail damage with undervalued inventories that resulted in coinsurance penalties.
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Claim Example #1
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Southwest Dealership
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$904,000 of incurred losses
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40% Coinsurance penalty
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Without the coinsurance penalty, the total incurred losses would have been $1.5m
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Claim Example #2
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Western State Dealership
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$123,000 of incurred losses
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48% Coinsurance penalty
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Without the coinsurance penalty, the total incurred losses would have been $237,000
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Increase in Auto Availability and Value
Cox Automotive reported as of June 15, 2023, dealerships in the United States had 1.96 million new cars available. This is highest level of new vehicles since mid-April 2021. In addition, the average new car in the U.S. sold for $48,528 in May 2023.
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As auto values increase and weather-related events occur more frequently and severe, now may be a good time for auto dealerships to re-evaluate the value of their inventory.
Contact our experienced dealership underwriters to discuss your client's inventory and current coverage limits.
Download the
Dealers Open Lot flyer
to learn more about this competitive program.
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Ryan Specialty, 180 N Stetson Ave, Suite 4600, Chicago, IL 60601
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Cox Automotive. (2023, June 15). New-Vehicle Inventory Hits Two-Year High in May, Average Listing Price Dips.
https://www.coxautoinc.com/market-insights/new-vehicle-inventory-may-2023/
Cox Automotive. (2023, June 12). New-Vehicle Sales Incentives Continue to Climb in May, as Transaction Price Increases Moderate, According to Kelley Blue Book.
https://www.coxautoinc.com/marketinsights/kbb-atp-may-2023/
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The description of these programs are only a summary of available coverages. Actual policy language will dictate the scope of coverage in the event of a claim. Agents should read the full policy form and any applicable endorsements for full terms and conditions and should encourage their policyholders to do the same. The operations described herein are conducted by RSG Specialty, LLC, a Delaware limited liability company based in Illinois. RSG Specialty, LLC, is a subsidiary of Ryan Specialty, LLC. RSG Specialty works directly with brokers, agents and insurance carriers, and as such does not solicit insurance from the public. Some products may only be available in certain states, and some products may only be available from surplus lines insurers. In California: RSG Specialty Insurance Services, LLC (License #0G97516). Stetson Insurance Funding, LLC (Stetson), a subsidiary of Ryan Specialty, LLC, provides premium finance services to agents and brokers. These services may not be available in all states. Stetson does not provide these services to the public. ©2023 Ryan Specialty, LLC
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