#134 - Does Your Insurance Cover Riots with Rich Stazzone

Hello, welcome to this episode of the Independent Dealer Podcast. This week we are talking about burning your car lot down or if other people burn your car lot down. Are you covered? We have Rich Tazone here with Williams and Stazon out of Florida. They write nationwide and he's going to give us some great, great education on our insurance carriers. We talk about ISO companies, we talk about surplus line companies, and he gives us his four pointers. Stick around to the end. I know we're all super long winded in this one, but stick around to the end. We have four do not do's as a dealership, which I think I probably gotta go implement three of those today. Rich, say hello to the dealer community.

Hey, guys, how you doing? Pleasure to be here.

All right, here we go.

You are listening to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. Thank you so much for tuning in. Let's do this.

All right, guys and gals, we're here with Rich Stazon, as he just told us. It's like Stallone, but with Z. So very cool. But anyway, Rich, the biggest thing on people's mind right now is coverage for, you know, certain things. The one thing that came to, came up in a topic was the dealers that are. One of the dealers that got, I guess, got vandalized in Kenosha, Wisconsin during the riots. For some reason, their insurance didn't cover the, I guess the content, not the contents, but the cars on the lot. And so that started a conversation. And I know because, you know, my insurance agents, one of my best friends, you know, I know that I'm covered, but some people, I guess go with admitted type insurance and so you can omit certain things, get a better rate and anyway, can you just walk us down that path and let's figure out if we are covered, if we aren't covered, and how do we ask our agent whether we are covered and make sure that we're covered?

Sure.

Thanks a lot. I appreciate it. I'll start off by saying insurance companies matter. And what I mean by that is you can be doing business with an insurance company that maybe has a lesser premium, but you're not realizing that they're probably omitting certain coverages for that cost.

So.

Really good companies, I'll call them standard companies for this conversation would be companies that are offering a package program for the dealer industry that is admitted to do business in the states that they're providing that package. Most of those companies are what we call ISO companies. ISO is the regulatory body that provides the Forms that insurance companies use to provide you the coverage. So when you read your policy, all those words, it's written by ISO and most companies in the dealer space throughout the country, they're what we call ISO companies now, they can change that wording from company to company to exclude things or add coverage back in. But generally speaking, if you're an ISO company, I use generally the issue that you're bringing up is pretty much covered. So if you're an ISO based company that's admitted to do business in the state, your inventory is pretty much going to be covered. Vandalism, mischief, things like that. The ISO exclusion that everyone's worried about when it comes to inventory. And just for this conversation, inventory is one form of property. Then when we say property, we'll be talking about buildings, because it's two separate coverage lines, right? You have your inventory covered under inventory under the garage package policy, and then you have your building covered under another section. So it's two separate sections on the way they're covered. So as far as inventory goes under an ISO policy, the only exclusion that people worried about is war and civil. Not civil unrest. War, civil war, any kind of. And civil unrest is not mentioned as an exclusion. The only way you could kind of get to that, if maybe one of these states actually call in a National Guard, you could maybe make the case. And when I say maybe make the case, an insurance company could maybe make the case that that's actually war, because National Guard is an army. But that is a big stretch, I think I can tell you. Yeah, yeah, It's a huge leap. It's a huge leap. If your insurance company tried to make that leap, I would say try, probably try to find a different company to do business with. Too late.

Let's just start real quick. So what is the difference in cost between an ISO company and one of these other companies? Because it can't be that much. Right.

So as a package. Right. And I stress package, that means these are companies that are offering you the liability portion of the policy. So premises liability, auto liability, they're gonna also insure the building and they're also gonna insure the inventory all on one policy. Parts of the country that don't have adverse weather are very used to getting packages. Right. They start to fall apart when you go to states like Florida because of hurricanes, you go to states like Texas because of hail. You know, things like that. Once you get to the adverse weather states, packages start to fall apart. They don't want to do the inventory, they don't want to do property. But to answer your question, if you do business with a package, naturally it's going to be more affordable because you're not piecing out separate policies to do. Hey, one company is going to do the liability, one policy is going to do your property, and one policy is going to do your inventory. Generally speaking, setting up your dealership that way would cost more than if you were able to actually put that whole thing under one company to do the package. So as far as cost effectiveness goes, you kind of want to deal with someone that's able to do the package. But dealers don't always have that option. Specifically larger independent dealers that have a lot of inventory. There was a lot of disruption in the marketplace when Zurich left the independent auto dealer space. They're no longer insuring independent auto dealers throughout the country. That was a huge void. Then a year after that, AmTrust pulled out. Both those companies are packaged companies and they were national package companies. So now there's only a handful of. Of what I would consider national package companies. And then the rest are regional package companies. Right. Like auto owners somewhere throughout the country. They're not everywhere, but they have their pockets, you know, and other companies in the Midwest and out in California.

It.

Seems like auto owners is kind of pulling out too. Is that. I heard some grumblings on that. Luke. Didn't you see some dealers that said they were getting dropped by auto owners?

I think it depends on the state, honestly.

It does. It does.

Auto. Like for instance, I'll just use Florida as an example. Cause that's where we're based. I mean, we write dealers in every state, but in 2005 and 6, we had three hurricanes that rolled through. And then auto owners was like, whoa, we're out of here. But then they jump back in in 2010 and then, oh, we're out of here now. They may be fiddling around again. So, you know. But auto owners is it. Auto owners is a generalist company. Right. So they just happen to have within their general offerings a pretty good dealer program, but they don't specialize in dealers. So typically when you're buying an auto owners policy, most of the time I always have to use generalizations for this conversation. You're probably dealing with an agent that doesn't really specialize in dealers and maybe insures five, six or seven of them. Right. Because he has a pretty good deal with auto owners. But that agent probably doesn't really understand the dealer industry like you would if you were dealing with a specialist, let's say. But the product is a good product. Can't talk anything bad about auto owners policy. Like for instance, I doubt they're an ISO based company and they don't really have exclusions. Your inventory is probably covered in the civil unrest situation with an auto policy, for instance. Right. And now as far as buildings go, it's separate. I think you'd also find under an ISO company building to be covered as well. It might be a little easier for them to make the leap for the National Guard than on inventory, but it's still a leap where you probably start to find deficiency in coverage. Where those type of situations are not covered is when you're no longer doing business with an admitted company and now you're doing business with a non admitted company, also known as a surplus lines company. Now those type of companies are not licensed to do business in the state that they're doing or they're not approved. I should say. So when you don't have to go through that approval process, you're more liberated to write the policy how you want it. Right. So all these states have rating boards and coverage boards for you to do business in that state. You want to do business in Florida, you have to submit your filings, your rates, your coverage and justify all that. That's how you get admitted. They say, hey, now you're admitted, we approved you. Very difficult process in certain states to get that approval. Or you can do it on a surplus lines basis saying hey, I'm not going to go through that approval process, but I'm still going to provide coverage in your state. Now why would they do that? Well, because now they're going to curtail that policy to fit what they want to offer you. Oftentimes it's removing coverage. Very rarely does a surplus lines policy offer you more coverage. There are certain instances, but generally speaking it's less coverage. And they also have all kinds of different types of endorsements to remove that coverage. So you, you could have a civil unrest exclusion in your surplus lines offering and not even know they have all kinds of exclusions. You have to read your policy, you have to read the endorsements associated with.

That policy because those policies go ahead and rich. So to help us diagnose which of those buckets we sit in for very simple, simple folks like me, the telltale sign is going to be a who is your insurance agent. Right. Cause we all go through an agent. Most likely none of us are out on the open market shopping this ourselves directly. With any of these companies you typically would go through a broker, an agent. The telltale sign for a dealer to think that, hey, maybe I need to check under the hood. Is my agent only does a handful of car dealerships. He is not a car specific insurance guy. I would imagine if someone comes to you rich, and says, hey, I'm in the state of Utah, I, I need lot coverage. You're not going to hand them one of these a la carte type coverages, right? Unless you're like, hey, you guys are crazy hard to cover. You need to know I got you some coverage. But it's under these crazy, crazy circumstances. Right. Whereas your mom or pop dealer will just be like, hey, I got you this policy. Here you go. But he doesn't know enough to know that you do need to have coverage for this crazy event. He's just stoked that he got you underwritten that.

So, so, yeah, so. Oh, go ahead.

Is that close to the dealer knowing if he needs to check under the hood or is it, is it kind of like, is it based on the carrier? Like if I use Bob's insurance out of Wisconsin, I probably have a lot of gaps in my policy, whereas if I have auto owners or Pearl, I'm probably covered. Is there any like, quick litmus test?

So, so to your point about doing business with an agent that only insures five dealerships, typically those agents don't have access to the insurance companies that specialize in the dealer industry. Right. So you're not going to be able to call up like one of our largest partners, Harco. Right. Harco writes dealerships throughout the whole country for us. You're not able to call Harco and say, hey, can I get an appointment with you to write dealers, I insure Bob's auto dealership down the street. No, that's not gonna work. They're gonna say, sorry, you have to have expertise in this industry. It's a very high loss industry. Right. Insurance companies get their butts handed to them in this industry all the time. So they want insurance companies gonna want to know that you understand the industry and then also want to know that you can perform and put premium on the books.

Right.

So all these insurance companies have large premium thresholds for you to get an appointment with them. So yeah. So typically you probably want to deal with an agent actually has those premium thresholds and that amount of premium with these companies, not only because they have access to a lot of these companies, but then they have leverage with these companies to get you the best deal along with ensuring that you get the right coverage. Now when you were talking about insuring you In Utah, it depends on the dealership. Right. So if you're going to tell me you're selling dump trucks, I would tell you that all the standard companies really don't want to do business with you. So although you may be a great risk and you may have great business practices, best practices in place and not have a lot of claims, they just don't really want to insure dump trucks. In those scenarios, a surplus lines policy is fine for you because that's probably going to be the only option that you have, and that's fine. Surplus lines policies aren't necessarily bad per se, but you do need to understand what the deficiencies in your coverage may be because you're buying, you're selling dump trucks and this is the only type of policy you can purchase. Now, assuming that you're selling just standard autos, right. And it's a normal dealership. Well, yeah, you'd want to try to go with a broker that can provide you multiple offerings for a package to ensure all your coverage on one policy. But go ahead, Rich.

The question I have, and I think this is pretty typical, but if you're a new dealer and your credit's kind of poor and you know you're, you just, you know, it's hard to get written.

Right.

And is that when some, is that when some dealers get kind of roped into to the bottom of the barrel insurance and if a loss like this happens, I mean, they're more vulnerable. Right. Because those two are business forever. I mean, we kind of have the best of the best insurance typically.

So when you're new in the industry, because the barrier to entry in this industry is pretty low. Right. Most states have a pretty affordable bond. It's not a high limit, right. 25 grand here, 50 grand there, maybe 100 grand a couple other states. But generally speaking, that bond's inexpensive. And the only coverage typically that you need to actually get licensed in most states are just the minimum state liability limits. So you don't have to insure your inventory, you don't have to insure your building, you don't have to have a million dollar liability limit. So the policy is generally affordable and the bond is generally affordable. So you get a lot of people that are interested in getting into this industry because the barrier of entry is so low. But to your point, absolutely. If you're just John off the street and you have zero experience selling automobiles, you're gonna have a real hard time getting a premium carrier to want to do business with you for a couple reasons within the first three years think it's the statistic could have changed, but 60, 70% of the dealers go out of business in the first three years. Right. So there's a high likelihood you're going out of business. So insurance companies typically don't want to insure businesses that aren't doing well. And then also they want to ensure that you know what you're doing, how you're going to title a car, how you're going to do the odometer statement, the truth and lending statement. There's all kinds of errors that can be made. So, yeah, it's a little bit more difficult for you as a new dealer to get access to better companies. But you know, if someone was a GM at a real successful store for years and he wants to go out on his own and start his own deal, that guy would have no problem getting good, good coverage, even though he's new in business because he's been in the industry for a while.

Yeah, I mean, you got to look at the liability side because really the exposure to insurance companies is liability, not necessarily property coverage. And I, you know, and if you're experienced, of course your liability should be less. Right, Rich?

Well, sure. I mean, we call it best practices. I spent the first. We're a family owned business, we've been in business for 30 years. But when I first started out after I graduated from college, my job was actually handling all the new and business leads. So everyone that came to our agency that was just starting out, I would have a 30 minute conversation with them on what the best practices are for you to ensure that you help mitigate your claims. Claims happen, right? Car accidents happen, but how do you help mitigate those losses by having best practices on your lot? So I spent years doing that in my early 20s. So yeah, if you have the best practices in place and an agent that can help guide you along that path, then you should be able to help curtail those claims that may be in your future.

I think that's so important. Dealers don't understand that. It's not. The liability is based on your experience a lot of times. And you've got to, you, you've got to have a good agent like you, Rich, to teach people what is a claim, what's not a claim, the practices you should have within your dealership on things you should do and should not do. Jeff and I were talking just a bit ago before we got on here about, you know, about a couple things when it comes to, you know, who's driving your cars, period, you know, Whether you're transporting them from the auction via truck or driving them with somebody driving the car. And I'm under the oppression, we don't drive cars anywhere. If it's coming from an auction, they're being, they're being hauled by someone who's self insured or insured on their end. So there's all kind of different ways to mitigate liability. And dealers just don't get that information. I wish. Rich, maybe you need to come do a, you know, do a virtual convention on something like that. Because, man, I tell you, dealers need to know that.

Well, I've done many, many not zoom calls. Obviously this is all new, but prior to the Corona Covid where we're endorsed with like the Fiada, the Tiada in Texas and Florida, more important than the NIDA and the NIDA, I've actually gone to some of their 20 groups and did presentations on just this thing. We're talking about how to mitigate potential losses. And the number one thing I always open with, and you hit the nail on the head right there, Luke, is who has access to your dealer tags, who is driving your cars. That is the first thing you should have a discussion with with your dealer because most of your claims are associated with auto claims. Premise liability claims are, they're still there. But your auto liability claims are where you see the frequency and yeah, who's driving your cars and why are they driving their car? And if you can't help right off the gate, if you can limit that, you're a step ahead of most dealers.

I agree.

I agree. Jeff.

I don't want to hear it.

He's one of the offenders. Yeah, there's probably not by choice.

He didn't sound like.

There's probably a whole list of things that dealers just get into by bad habit or laziness and they just don't realize because we don't always look at it like, what's my exposure here? Is this a big no, no or is this just a gray area and that's, I mean that's a whole nother podcast to have. I'd love to have like 20 bullet points of like, these are serious do not do's in your dealership that you're doing right now that are not worth the risk reward. You know, you think that putting sending your new lot tech down the road without having his license on file or pulling a driving record or any of these other things, you think it's okay, but guess what? Massive exposure, you know, whatever the case may be.

Yeah, we insure thousands of dealers nationwide. And I can give you some real life examples of just one right off the top of my head. I had a dealer who allowed a whole family to go on a test drive in a minivan. Five people in that car, and they got into an accident and they had five separate claims. And what are you letting five people go on a test drive for? What is it? Why do these children need to be in the car with them? So that's just one example. Don't ever do that. One person, maybe two, but that's it.

That's so important. People don't even think about that, Rich. And these are dealers out there listening. These are the things you need to know that we don't think about necessarily as car dealers. But someone who's a specialist like Rich, that's what they're trained to do. As we're trained to listen to whether a car is making a certain noise. Rich is trained to help you be a better dealer. And we need to start listening to our insurance agents, good insurance agents. Not. Not just anybody off the street.

Well, you know how it is. I mean, I don't know the pecking order, but insurance agents, lawyers, and car dealers, you know, we're all fighting on who's the bottom of the other pecking order there.

So we're all in the same boat, brother.

We're all responsible to make sure that we keep our industry and our reputations above board.

Sure.

So, rich, hypothetical situation. Well, not hypothetical, practical situation. I'm gonna go personal and a little selfish here for just five minutes Yesterday, I'm sitting here looking out on my dealership. We had some pretty high winds, right? It was like 50 something miles per hour, whatever. Next to me is a roofing company. They have a big shipping container, and on top of it, they decided to stack some corrugated sheets of metal, and they used a wood pallet to hold them down. Of course, the wind whips that up. This was like literally 24 hours ago. Smashes two of my cars. The pallet, you know, puts a pretty good gouge in one and some scratches down the other. Right. As the dealer, what do I do in that situation with these types of things? Do I make a claim against my insurance company? Do I try to get them to pay cash? Do I try to claim against their insurance company? Like, what is best practices where it's like, it's probably a couple thousand dollars of a fix. It didn't wipe out cars, But I've got a deductible, right, that I would have to meet anyways. Are These conversations you have with your insurance agent, or is it best to just kind of stay off the radar, fix it yourself, because you don't want to be head up and get whack a mole by your insurance company.

I would tell you that it's great that for you to have a relationship with your agent, to have conversations when you're trying to figure out what to do with a potential claim, you should be able to call your agent up and have a conversation and talk it out. Now, what I would advise you in that situation is first walk across the street and say, hey, look what you did to my cars. Are you gonna fix that? Right. Ask them. If they say yes, then we don't even need to discuss anything.

Right.

But if they're balking at it, right, let's say that, all right, they're not gonna fix your cars. Well, then you have a deductible. Most have $1000 deductible. Right. If you're saying it's 2000 per car and then so you're gonna realize $1000 from your insurance company, well, I would tell you, look how every, every, every dealership is different. If you had had a bunch of claims years prior, maybe car accidents or some kind of weather event building burn down, and we really need to tighten up a bit and have some claim free years to make sure your insurance program is not going to go sideways on you. I would tell you, hey, you might want to eat those. If you have been Claim free for 25 years and you're like, man, I've never made a claim in my life and you're really feeling like, hey, I want my thousand bucks right here. Hey, go ahead. That's what insurance. You will always hear from me. Insurance is there for a reason. And if you have a legitimate claim, file it. I will never tell you not to, but I will strategize on your behalf. On. I feel like my job is to manage your insurance program. Right?

Yeah.

And sometimes that means eating small claims. Sometimes that's just what it is. Every dealership is in a different position based on their history and the type of dealership that and how much premium you're paying. Right. Your dealership paying three grand a year in premium. That's a lot different situation if you're a dealership paying 300 grand premium and you had that accident. Right. So you need to have a conversation with your agent that understands how to properly maneuver these insurance companies to make sure, which I feel like my ultimate job is, is to keep your insurance premium flat. Right. I mean, flat is always good. There's no such thing as decreasing insurance premiums, as we all know in this industry lately. Rates are going up for property, rates are going up for inventory, rates are going up for liability. So if I can keep it flat, I feel like I've been. Success. Success. Another.

Another, for instance, Jeff, in that situation is we were involved in a. We got wrapped up in a lawsuit for a blowout tire, which I've told you about. You know, it's. We got sued along with Ford Motor Company, Bridgestone, Firestone, everybody in the world. Right. And we got wrapped up in a liability case with five people in a car, a car we had sold 10 years ago. Right. The worst case scenario, well, we ended up selling out of court. It ended up costing my insurance company $110,000, whatever it was. And we did. We were not in the wrong. Period. Under deposition said we weren't in the wrong, but we still had to. We still had to come out of pocket. Well, our insurance company had to come out of pocket. Well, my premium had been about, let's say, 15 grand a year. What jumps to $27,000. Right. Immediately. And because we're still in litigation. Well, that goes on for the second year. My premium still pretty high. Well, as soon as the litigation ended, our premiums start going back down. They're still trying to come down, back to where they were. But in the midst of all that, I have somebody on the lot overnight tries to burn one of my cars to the ground. I mean, it was a, you know, probably eight, $10,000 Tahoe, and it burned it to pieces. I didn't make that claim. And the reason I didn't make that claim because, I mean, we. Our insurance company already forked out a hundred grand. I can lose $10,000. Right. And that's what I had to do. So strategy is big. You know, we went over this. If you can lose it, lose it. Because who knows? They may not even have rid me the next year.

Yeah. And just to clarify what I said before, I was strictly talking about property damage. Anytime there's a potential liability issue with a third party, always got to turn it over. Oh, yeah, yeah, yeah. You can't mess around with that. It can get sticky. I have some big clients that want to try to handle it with their own attorneys, and that can go sideways on you, too, if they don't do a good job. And then you try to turn it over six months later. But you've made their physicians worse. Yeah. You know, the insurance company, like you Said you may have had no liability loop in that situation. But they're just doing an analysis. They're thinking, okay, they may be on the hook for half a million, but we can settle for 110. Let's just get out of this thing and be done with it. Now, some clients may not like that because you feel, oh, I have no liability. That's not how it works. The insurance company is going to hedge their bet whenever they can because they're not going to want to. Want to be on the hook for a half a million. And even worse, let these things go to court and you have a judge and a jury involved, then everything's possible. You never know, right? So there have been cases where insurance law has been rewritten by a judge and a jury where something was supposedly excluded. There's no chance. And then you take it to court, and all of a sudden, whoa. And that sends shock waves down the insurance industry because now you have insurance companies scrambling to change their policy forms because those things are no longer valid. Right. So, yeah, it's. It's an important discussion to have with your agent.

And let's. Let's go over this. What Rich just said is so important. I just want dealers. We're gonna. We're gonna be quiet for a second. We're gonna. We're gonna say this one more time. If you have something liability that comes up, the first call you should make is to your insurance agent to start the claim. Correct, Rich?

Absolutely.

Absolutely. And y' all gotta remember, liability means that someone is suing you because they don't believe that their finance contract is right or that the miles were wrong or this or that. Anything that gives you liability, you need to contact your agent immediately.

So Luke, along with regular insurance reinsurance is a different situation. Right. It's like you own your own insurance company to a degree. Right. And everyone who listens to the podcast know Dealer Re is a great sponsor. They're the one company out there that has gotten behind us and really said, hey, guys, we like what you're doing for the community. We're gonna throw a couple bucks at you. I actually just got their check today, so pretty exciting stuff. But we stand behind it because we believe in it. Right?

100% reinsurance, as I tell people over and over again, I think is number one wealth building product in the car industry. Maybe I should tag that, Jeff. Number one wealth building product in the car business, anyway.

Tm.

Tm. But it is. And it's not just about. It's in control. You get to Control, not the customer, but you can get to control the repairs for the customer and you get to ensure, you know, you can ensure your gap, you can ensure cpi. There's so many things that the reinsurance company will help to do to make you more profitable in the dealership and also build wealth outside the dealership. So reinsurance, yes, reinsurance in itself is insuring your insurance. And so good episode to talk about it and just a great product to have. I'm glad you finally jumped on board, Jeff, and I'm sure you're starting to see the rewards of it.

Yeah, yeah, we have our reinsurance. We're going to get the guys from Dealer Re back on here to talk a little bit more about the CPI product. I'd love to dig into that deeper and figure how I can get more penetration. It's basically money that's going out the back door to the other companies. If you're paying other people for a service contract, if you're paying letting your customers pay other people for insurance, it's absolutely ridiculous. Call the guys at Dealer Re. Get your own reinsurance company set up. Back to the podcast. Rich, quick question. Does more coverage, as in like you have more coverage in your policy and maybe also on umbrella, does that make you more of a target? Is there a quick answer to that?

I wouldn't say the more coverage makes you more of a target because they don't know that. But the size of your dealership certainly does. I mean, we insure national accounts, you know, have over a thousand employees, independent auto dealers. Right. Like huge accounts. Yeah, those guys are target every day.

So.

Yeah, So I mean, they can make an assumption. The bigger you are, the more insurance coverage that you carry.

Sure.

I mean, that's a. There's a loose correlation there, I would think.

I don't think. I mean, there's no way they would know that you even had an umbrella if you had an umbrella, right?

Nah, they don't know for sure. But I'm just saying if you're big, they might make the assumption.

Right. They throw it against the wall and see if I go to lunch, one of my best friends is a slip and fall attorney. And I think that's their new shtick is just to throw out that form letter that, hey, we know you have another insurance policy. Whether you do or don't, they try it.

Yeah. Without an action.

Do you recommend umbrellas for dealers, Rich?

So, yeah, I mean, umbrella is such a loose term used in the insurance world and in the dealer world, even more so. They're typically not umbrellas. What they really are what we call excess file form. Right. They're excess coverage to file the underlying. Because umbrella is actually technically something really different. And I know I'm being podcasted here, so I have other agents like, oh, this guy doesn't know what he's talking about. So we'll just call it what it is, an excess file form. It's an additional layer of coverage. Million, two million, five million to cover what is the underlining. And yeah, I mean look, I've seen million dollar claims get exhausted. A million dollar limits on policies get exhausted for claims. So it can exist, it happens. I've seen it personally within our own agency. So depending on your assets, the size of your dealership, you need to make a business decision based on the limit of liability you need. So typically you'll have the million underlying and then if you think you need a 1, 2, 3, I mean we do up to 20 million umbrellas for huge, you know, big franchise dealers. Right. So it depends on the dealership where that's a business decision. I'm going to give you pricing, we're going to go over it and you're going to say, okay, I'm willing to go up to 3 million because it's this much. But 5 million, that's too expensive. Right. It's a decision you make. I'll advise you where I think you need to be and then you'll make the clear proper businesses.

Yeah, but if you. A true umbrella policy would be maybe more on you personally. Right. Like your home, if they exhausted your dealership insurance and felt like they could go after you personally. Also, you may have something that steps in or if it happened while your wife was driving the kids through the neighborhood or I don't know, something, something more personally related. They try to. Or maybe dealer, I don't know, dealer incited, but they get to you personally. Is that.

Well, there's dealerships. Oh, go ahead, Luke.

I should say, I mean I would recommend an excess policy coverage and then an umbrella, personal umbrella on top of that as better.

Yeah, so we, my brother owns a personal lines agency and I don't do personal lines at all. But you know, if one of my dealer principals is like, hey, can you share my home or my cars or whatever, obviously I have a relationship there. I'll do it real quick. But yeah, personal umbrella is like the cheapest thing you can purchase. It's 5, 6, 700 bucks depending on the state you're in. A million, $2 million in coverage. It's A no brainer for a dealer principal to ensure he has a personal umbrella on his homes, his toys. Right. Waveron, his boats, RVs and his car.

Right.

That's what they're doing.

So interesting. Sorry, Rich, did you have. Go ahead.

One thing we haven't discussed that is a lot more common and is probably applicable to some of the dealers that we listen to. This is the inventory piece on the package policy for dealership is becoming increasingly more difficult to insure, especially in those cat states. So you have a lot of large dealers now have a separate inventory policy. Right. And that policy is different than when it's in the package. But as far as the topic we were discussing, what's going on in the streets, civil unrest and people rioting, things like that. Even those policies, you're pretty much gonna have coverage for that. It follows. It may not be a straight ISO form, but it follows the ISO exclusions, which is war, civil war. Those real dramatic. I think we're quite a few steps away from this being a civil war in our country. So it's still, I think, a leap of. It's still a leap of faith, I think, for an insurance company to try to have that exclusion.

If the news media had their way, they may start calling it a sick.

Oh, whatever.

Unless you live in Seattle or something.

Oh, Lord. Yeah.

Rich, to wrap this up, could you give us. I'm gonna put you on the spot. Can you give us like two or three or four, just real like obvious general like, do not do's that you see dealers doing all the time. Because when we get into this, Luke says something like, like our conversation before, he's like, wait, you have people driving your cars from the auction to your dealership? And I'm like, maybe like, do you have any? Just super blatant, like, I see so many dealers do this. They should not be doing it. They need to stop it today. Any quick, quick, like advice you give us as we leave?

Yeah, no problem. I've authored, I can't tell you how many articles in dealer publications throughout the country for state associations, you know, so this topic always comes up, but right out the gate is tag control. That's what I mentioned first. Your dealer tags. Know where they are, have them see them, right? Don't ever be like, where's my dealer tag? That sucks if you don't know where your dealer tag is because someone's probably using it. So dealer tag control, very important key control. Who has access to your keys. They all should be locked up real tight and. And be very Limited on who can check them out. When they do check it out, have a redundancy on who has to check it back in. And if you're gonna have it single, redundant, and only one person dealing with that, make sure it's been a long time employee that you trust, hopefully a family member. Key control is one. Loaners, right? Loaners is a huge exposure. Loaners for service. Loaners for service units are technically covered under the garage form. Well, it's actually called the all the dealer coverage form. Now, that's covered. But I would suggest to you do not do that. If you have such a large service facility to where you think you're required to do loaners, the first thing I'll tell you then is send them down to Enterprise. Right down the street, pay the 25 bucks to put them in a car. Because if you get one of these loaner accidents, it's a nightmare to get you coverage when you get canceled because of that claim. And if you want to actually monetize it, I'll get you into the car rental business. And you don't have to send them down to Enterprise, which is a horrible.

Business, but we won't go there.

Yeah, well, you know, hey, if you want to get crazy, get into it. I'll help you get into it. But that's, you know, that's number three for sure. Those are three of the big ones. And then not necessarily mitigating loss, but very important for a dealer to do, and most don't do. Read your policy. Most dealers don't read the policy. They have no clue. They're relying on the agent. That's great if you have a good agent, But I would suggest to you, it's important for you to understand it through your own eyes, not just through your agent's eyes. Read your policy and understand what it is you're purchasing. And that way you'll have a better conversation with your agent.

Yeah. That's awesome.

So what you're saying, Rich, is if car lot gets burned down across the country and I start to panic and I email my agent, hey, is this something I'm covered for? And what's today the night? So three weeks later, I haven't heard back from him, does that mean I.

Need to change agents? Absolutely.

All right, Rich, how do people like me who need to change agents and other dealers get a hold of you if they want to have this more of a conversation and look at what they've got going on?

Okay, so I'm Rich Stazone from Williams and Stazone. Insurance agency. We're based in Melbourne, Florida. You can call me direct on my cell phone. I give my cell phone out to everybody. 954-554-6870 or you can email me your contact information at rstizone S T A Z Z O n e@wsins.com awesome. Rstezone sins.com hey, Rich, I'm pretty sure.

Y' all are partners. Y' all are NIADA partners, correct?

We are. We're their preferred insurance provider. We've been partners with them for I don't know how many years now. Great organization. We're real big in supporting state associations because we feel like the dealers that are involved with their state national associations are the good dealers, the guys that are trying to make sure that our industry thrives. And they're vesting their time and energy into doing that. So we feel like if you insure those guys and insure those guys friends, then you're insuring a bunch of good guys.

Yeah, 100% agree.

Yeah. I do think. As an interesting little side note, I don't think that dealership in Kenosha was a part of the association.

Nope, they weren't.

Right.

We've confirmed that. And maybe if they had been, they would have gotten a better agent, made sure they were covered.

Thanks for your time, Rich.

It was a pleasure. I appreciate it, guys.

Thanks so much.

Thank you for joining us today. Hope this episode inspired you to take positive action. Remember to subscribe so you get each episode the day it comes out, and we would love your help spreading the word. Leave us a review and share this podcast with your dealer friends. Dealers helping dealers learn and grow together.