Valet Parking Insurance - For information contact KPhillips@alliantinsurance.com
Since starting ValetPark.net almost one year ago the question I am most frequently asked is "Where can I find valet parking insurance?" Unfortunately, for a lot of smaller parking companies there is no easy answer. I recently interviewed Kathy Phillips, First Vice President of Alliant Insurance, about the future of insurance in the parking industry. Kathy, a graduate of California State University, started in the insurance industry in 1976. In the early 1980's, as the insurance industry went into a hard market, Kathy specialized in the parking industry and focused all of her efforts in that area. For the past 25+ years, Alliant has insured hundreds of parking operations, both large and small, nationwide for all lines of insurance.
Q: Alliant Insurance is known for specializing in the writing of insurance for parking operators. Tell me a little bit about the company's history and the impact Alliant has had on the parking industry since 1980...
A: In the early 1980's, the insurance industry entered into what is known as a hard market. This is when there is a rapid rise in insurance prices, reduction in coverage's and terms and less availability of insurers willing to write businesses with higher exposures, such as parking. My career all started with the placement of one well-known valet parking company who was being non-renewed by their standard carrier and could not find coverage anywhere. Our agency was contacted and coverage was placed within 24 hours, although at an increase in premium, increase in deductibles and lower limits. We realized that if this parking company was having trouble in the placement of their coverage, then more than likely others would be also. We immersed ourselves in the understanding and needs of parking companies and within the first year of placement of this type of business, we created a unique form of coverage with a specialty-rating basis. The parking industry was thrilled to have an brokerwho knew and understood their exposures and needs and we responded by placing insurance to meet their needs.
Q: You recently spoke at the National Parking Associations Convention in Philadelphia. What were some the topics discussed?
A: At the 2002 National Parking Associations Convention, I spoke at one of the breakout sessions entitled Driving Down the Cost of Insurance: Who's in the Drivers Seat? I spoke about the insurance industry in general, where the industry has been and what has impacted the insurance industry as a whole which has created another hard market for the placement of insurance. My discussion then provided helpful information with respect to parking companies Risk Management, Loss Prevention and being Proactive in all aspects of their business. We discussed specifics relating the Hiring Practices, Contract Review and how to help reduce the cost of your insurance.
Q: It's no secret that the insurance industry is turning away from underwriting smaller parking companies...What are the main reasons for this and how have things changed in recent years?
A: The impact on smaller parking companies is the toughest area we all face. Some smaller parking companies operate on smaller profit margins and have less resources. Insurance companies, especially in a hard market, know and understand the relationship between premium and exposure and therefore recognize that for the very small parking companies, there is just too much exposure for the small premium they are allowed to charge. Insurance carriers who specialize in writing parking companies understand this also and therefore establish a minimum premium that they feel is necessary to charge to write a policy. This really has put the squeeze on the small operators.
Q: We've all heard the insurance terms "Liability" and "Garage Keepers Legal"...What do these terms mean to the valet parking operator and how do we determine if we have enough coverage?
A: Liability insurance and garage keepers legal liability insurance are two specifically different coverage's. Liability insurance provides protection for the parking company for their negligence should they injury or damage someone or someone else's property (i.e. Bodily Injury and Property Damage Coverage) This would be to a third party. Garage keepers legal liability insurance provides protection for the parking company for their negligence should they damage the customers vehicle in which they have taken into their care, custody and control.
Q: Typically quotes are based on volume and revenue for contract accounts such as Hospitals and Shopping Malls, What is the criteria for parking company's that specialize in special events?
A: There is no specific rule of thumb in determining if a parking operator is carrying enough liability limits. The decision behind choosing limits is to protect the parking companies assets. Keeping in mind that if a judgment by a court of law exceeds the limit of insurance, the parking company will have to pay the difference from their company and perhaps the personal assets of the owner(s). Very often, contractual agreements will establish limits of liability that the parking company is required to carry, but the parking company should not get lulled into a false sense of security in thinking that they are covered. Keep in mind that limits established in an agreement are only minimum required and that every allegation and claim is not going to be covered by insurance. After 25+ years in the insurance industry, you would think that I have seen it all, but you would be surprised as to the creativity of claimants and what they sue parking operators for.
Q: Why have you established a special form and rating basis?
A: Standard insurance carriers file their forms and rates with their individual state Insurance Commissioners for approval. The standard for forms, rating basis and rates in the industry are set by the Insurance Service Office (ISO). ISO as flaws in their forms used for parking operators and in their basis of rating based on receipts. Receipts do not necessarily reflect a parking operators exposure. Therefore, my insurance program was developed 25+ years ago based on the necessary coverage's for parking companies and a rating basis that more adequately relates to their exposure. For parking companies that do parking at set locations day in and day out, we have composite rates based on the type of parking exposure and number of spaces used. (i.e. self park rates, attendant park rates and valet park rates) In addition, most parking companies also offer private party and special event parking. We recognize that these exposures vary widely and we therefore establish rates based on a per event charge after we have reviewed the average type of event that they do parking for.
Q: I want you to look into your crystal ball and predict the future of the Insurance and Valet Parking Industries, What do you see?
A: Predicting the future of insurance rates and coverage's for parking operators is always difficult at best, according to the December 23, 2002 issue of Business Insurance they are predicting that exposures are forcing insurers to keep rates high for the foreseeable future. While rates have increased substantially over the past two years, often they are still inadequate and need to increase further Issues that still haunt insurance carriers are low interest rates, poor underwriting results for the late 1990's and the current lack of capacity from their reinsurance carriers. Based on the current economy and financial conditions, key insurance executives predict a continued hard market for at least the next three to four years.
Insurance is a major cost and affects the profitability of all parking companies. Small parking operators need to come to grips with their ability to survive in a hard insurance market and unless they have the financial resources they will not be able to get through these hard times. For parking companies that understand business and want to protect their assets, I have an excellent insurance program that can be customized to fit their needs.
CONTACT KATHY PHILLIPS: KPhillips@alliantinsurance.com
1-866-805-7275 X: 775