Motor Dealer Insurance
We believe our role is to assist in identifying claims trends as soon as possible, so that action can be taken to reduce or avoid repeat incidents. When claiming with CGU, we also like to provide commentary (where possible) in relation to procedural changes that demonstrate proactiveness following unfortunate claims. We thought it beneficial to share some examples that we’re seeing across the industry.
Due to the irregular influx of inventory from various manufacturers, we are receiving requests on a weekly basis to add temporary storage locations to current insurance programs. It is important to consider the security in place at the temporary site, as CGU will only confirm cover if their basic security requirements are met. These generally include a fenced/gated site, bollards at all entries/exits, appropriate key cabinets being used and a monitored alarm.
We have seen (and even assisted with) examples where secured car parks are being used by dealers to relieve the pressure of stock at certain sites. Whilst the security relating to the likelihood of theft is important, another consideration needs to be the location and expectation of foot traffic near the vehicles. We have received multiple claims by one dealer from the same temporary location due to the area and use of this particular car park.
It is worth noting that the CGU policy includes a sub-limit of cover for Malicious Damage, generally at $100,000 per event.
Frequency of claim has risen in recent times, with some makes being targeted due to their inferior protection. Dealerships who have not invested in upgrading their security have also fallen victim, as thieves generally like to pick the easiest target. A new trend we’re experiencing is theft by trickery. As certain vehicles become harder to steal, thieves are looking for more creative ways to obtain by deception and to avoid the difficult smash and grab scenario. This is in part due to the vehicles themselves but also the key handling procedures that dealers have adopted and improved over the years. Insurers want to avoid internal process based errors that lead to theft.
This is why our recommendation to consider Management Liability insurance is critical, as coverage may be available where the CGU policy fails, depending on the circumstances of loss.
POLICY EXCLUSIONS
Below are the relevant CGU policy exclusions/definitions that create obstacles when claiming in some of the examples mentioned above.
General Exclusions applicable to Section 1 & 2
We shall not be liable for:
5. Trickery
Your Policy does not cover any loss, destruction, or damage resulting from trickery, dishonesty, fraud, or subsequently dishonoured negotiable instruments, except and to the extent provided in Variation and Extension Unaccompanied Test Drives – Theft by a prospective buyer.
Theft means loss, destruction, or damage to Unspecified Vehicles or Customers Vehicles that occurs at/or from the Premises caused by or arising from burglary provided that:
a) there is a Sum Insured specified in the Schedule
b) the Theft did not involve the use of the Vehicles own key, unless the key was obtained as a direct result of a threat of violence to persons or property or the key was stolen from a securely locked safe, key safe, key cabinet or strongroom, and access was gained by the use of force or violence.
Motor Fleet Insurance