Laundromat business on your side as your insurance agent. Too much insurance is a waste of your money, while too little can be tragic. Only you can make the ultimate decision on how much coverage to carry on your business, but you might be wise to have someone knowledgeable in the Laundromat business on your side as your insurance agent.
DEDUCTIBLES ON YOUR INSURANCE
Insurance companies give a discount for a "loss free history" and you will lose this discount for three to five years after filing a claim. Assuming a 10% discount, and a policy cost of $2,000.00, you could lose a discount worth $1,000, and still become classified as a "high risk" if you have to file another claim for a loss in the next three years. The end result could be a non-renewal letter in the following year or an increase in your premium if you are able to be insured by another company.
Remember, you buy insurance for a rainy day and when it starts to pour you want someone who not only owns an umbrella but knows how to open it. Use common sense and ask questions. A good agent will encourage you to read your lease, especially the insurance requirements and will be able to answer your questions.
A second question asked is to explain an "admitted insurance company." This is related to your protection and the potential insolvency of the insurance company. A company admitted to conduct business in California operates under the rules and laws of California (including policy provisions and rates) and the policyholders are protected under the California Insurance Guaranty Association. CIGA provides benefits like the FDIC does to bank deposits. I recommend only using California admitted insurance companies.
A third question relates to the annual report produced by the Alfred M. Best Company and used as a measurement in the insurance business to calculate an insurance company's ability to satisfy policyholder's needs. The Best's Ratings range from A+ (superior) to NA-10 (state supervision-insolvency). I suggest you select only those insurance companies with a B+ and higher rating. A.M. Best also rates insurance companies based on financial size. This is important if you think a larger size company will survive better and have the ability to pay your claim at the time of a catastrophic loss. These categories range from Class I to Class XV.
SELECT, COMPARE AND VERIFY
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WHAT YOU SHOULD KNOW ABOUT INSURANCE
INSURANCE FOR CALIFORNIA LAUNDROMATS
YOUR FIRST IMPORTANT INSURANCE COVERAGE
Most leases permit the landlord to cancel your lease if the building is damaged in a fire with 25% damage or more is common. When your landlord discovers he has to pay for the majority of the fixtures including gas lines, sewer lines, water lines, electrical boxes, water heater, swamp coolers and walls, he often decides he would rather have a new tenant that won't cost him his own insurance money. Many Laundromat owners fail to realize that although they paid for creating the Laundromat and installing the equipment they cannot remove it at the expiration of the lease. Only the equipment that can be unplugged belongs to you. Therefore for insurance purposes the insurable interest belongs to the landlord and there is no benefit in having more insurance than you can collect. Of course, you should have enough insurance to pay off your existing loans and to protect against a loss of the money you've invested. Normally, you should insure your Laundromat for the purchase price plus any new equipment you have installed.
Vandalism coverage is a part of your "property" coverage and is another common type of claim, although troublesome, it will seldom put an owner out of business or be the cause of a major claim. Theft of your washers and dryers is rarely seen. It would be a notable feat to have someone enter your Laundromat and disconnect, unbolt and remove your washers and dryers. This portion of "property" coverage is in my opinion optional unless required by your lender.
YOUR SECOND IMPORTANT INSURANCE COVERAGE
When you review your lease to determine if the landlord requires his name to be added to the policy, read the section of the lease on the amount of liability insurance he requires you to carry.
You may be paying for overlapping coverage if you are paying for the landlord's building insurance policy through your common area maintenance fees. If this is your situation, you could ask your landlord if you could lower your level of liability insurance to save money on your premiums.
Too much insurance is a waste of your money, while too little can be tragic. Only you can make the ultimate decision on how much coverage to carry on your business, but you might be wise to have someone knowledgeable in the
FREQUENTLY ASKED QUESTIONS
STOP PAYING TOO MUCH FOR YOUR LAUNDROMAT & COIN LAUNDRY INSURANCE