Un­der-in­sured busi­nesses are putting cus­tomers and them­selves at risk

Classic Car Weekly (UK) - - This Week - Fuzz Town­shend

In­sur­ance com­pa­nies are warn­ing cus­tomers that clas­sic garages and workshops may not be ad­e­quately cov­ered for their cars.

This can lead to own­ers los­ing money on dam­aged cars – and me­chan­ics risk­ing their own ca­reers and liveli­hoods.

Cars are at risk, should any­thing un­to­ward hap­pen dur­ing main­te­nance, restora­tion, or even out on the road af­ter work has been un­der­taken. In the lat­ter case one par­tic­u­lar point of vul­ner­a­bil­ity is when a garage has made a be­spoke part which may have failed, caus­ing dam­age to per­sons or prop­erty.

Own­ers us­ing a clas­sic-re­lated busi­ness for ser­vice, re­pair, MoT, restora­tion or stor­age need to be sure that their ve­hi­cle is cov­ered and if, in the event that the busi­ness has not com­plied with the in­sur­ance pol­icy terms and con­di­tions, that any claim aris­ing will be paid.

Cur­rently, it is dif­fi­cult for clas­sic car own­ers to have any cer­tainty of this.

In the event of a to­tal loss within the garage it­self, ve­hi­cle val­u­a­tion may be at risk, es­pe­cially for cars that are unin­sured in their own right un­der­go­ing in­ten­sive restora­tion, hav­ing not been on the road for many years.

Own­ers and busi­nesses, alike, are at risk, with MoT test­ing cen­tres es­pe­cially vul­ner­a­ble to the per­ils of un­der­in­sur­ance, when a visit­ing high worth car could eas­ily out­strip the garage’s max­i­mum in­sured value.

Garage tools and equip­ment re­place­ment costs are of­ten ‘guessti­mated’ rather than be­ing cor­rectly val­ued and un­se­cured tool­boxes are of­ten not cov­ered for loss or theft.

Many in­sur­ance com­pany clauses and ex­clu­sions can catch garages un­aware, and there is a dan­ger of com­pla­cency when re­new­ing.

The in­dus­try site,­sur­ance­ states that 82% of bro­kers had en­coun­tered ex­am­ples of un­der­in­sured small busi­nesses with 16% hav­ing seen the same type of com­pany go out of busi­ness as a re­sult of un­der-in­sur­ance.

Gra­ham Meacher sales and mar­ket­ing di­rec­tor for the in­sur­ance bro­ker Ernest R Shaw, says: ‘We are notic­ing a wor­ry­ing trend from the ma­jor­ity of the new busi­ness en­quiries we are be­ing asked to look into. The main find­ing from the in­sur­ance re­newal re­view is of un­der­in­sured busi­nesses in the clas­sic car restora­tion in­dus­try.

‘In ad­di­tion, there is a lack of un­der­stand­ing of the con­se­quences of not hav­ing the cor­rect level of sums in­sured, which in the event of a claim will leave both cus­tomers cars and busi­nesses open to un­nec­es­sary ex­po­sures in the event of a loss.’

Your car’s in the shop, but is it ad­e­quately in­sured while it’s there? Many aren’t.

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