Are Increased Insurance Rates Turning Laundromats into a Non-Profit Enterprise?
By “Laundromat 123”
It’s a scary situation to increase prices in a competitive marketplace. If you’ve got five, six or seven other laundromats in your marketing area radius, you can reasonably be concerned that if you increase your vended prices, you’ll lose customers. Low-income areas are certainly impacted by this aspect of increased pricing.
No matter how clean you keep your store, how well-trained and friendly your staff workers are to your customers, or how many new big machines you have to offer, price is still a guiding aspect of our business.
Increased cost of rent, labor, utilities and the cost to buy equipment have long been prime motivators in laundromat owners increasing their prices but recently, in certain areas of the USA, another increase has popped into view. The cost of liability and property casualty has jumped up as a high-cost item for many owners. In Florida, Texas and California some rates have doubled and in some cases insurance coverage is almost unavailable. Keep in mind that insurance company profits on laundromat policies are not high profit margin items for the carriers, so these policies will often be among the first to be dropped.
Many of you may be facing these large premium increases or outright notices of non-renewal. It’s a good idea not to wait until the last minute to seek quotes on coverages. In the insurance sales portion of my business, I only have three remaining sources that will insure coverages in California. If you’re concerned give me a call to discuss any aspect of insurance coverage and available options.
Some owners have opted to reduce their coverage or even select non-admitted carriers for their insurance and risk violating the terms of their lease agreements. Business insurance is often the poor step-child for the major carriers in States where large profit generator coverages are removed by fire, storm or water. State insurance commissioners have been slow in many States to allow the carriers to increase their premiums to match their perceived risk. The result is a major tragedy drives these insurance carriers from all types of insurance in a particular State.
With the recent increase in Wash/Dry/Fold and pickup and delivery for many laundromat owners the future may hold even higher rates for those engaged in non-self-service activities. Underwriters, so far, have been slow to include the risks of these new activities in their underwriting evaluations and projections of losses. These new activities will have incidents which have not been considered and will result in exclusions or price increases.
The addition of a pickup and delivery service is one area worthy of consideration for insurance coverages. Do you have a written contract or employee manual covering all of their off-premises duties? What is the driving record of the employee making the deliveries? Is your worker driving a company vehicle? If your worker is involved in an at-fault accident what is the liability of the laundromat? Is your delivery worker bonded? What is your liability related to potential theft, damage to property or assault by your employee while on delivery services? What if your driver is found to be intoxicated or under the influence of drugs while involved in a delivery related accident?
Failure to properly define, consider and cover your business risks can leave you with a large exposure to a lawsuit from a customer, employee or worker. Errors can leave you in the non-profit status or worse in the ownership of a laundromat (laundromat definition is a self-service business). Does your current policy cover all of your activities of your business?
Are Increased Insurance Rates Turning Laundromats into a Non-Profit Enterprise?
By “Laundromat 123”
It’s a scary situation to increase prices in a competitive marketplace. If you’ve got five, six or seven other laundromats in your marketing area radius, you can reasonably be concerned that if you increase your vended prices, you’ll lose customers. Low-income areas are certainly impacted by this aspect of increased pricing.
No matter how clean you keep your store, how well-trained and friendly your staff workers are to your customers, or how many new big machines you have to offer, price is still a guiding aspect of our business.
Increased cost of rent, labor, utilities and the cost to buy equipment have long been prime motivators in laundromat owners increasing their prices but recently, in certain areas of the USA, another increase has popped into view. The cost of liability and property casualty has jumped up as a high-cost item for many owners. In Florida, Texas and California some rates have doubled and in some cases insurance coverage is almost unavailable. Keep in mind that insurance company profits on laundromat policies are not high profit margin items for the carriers, so these policies will often be among the first to be dropped.
Many of you may be facing these large premium increases or outright notices of non-renewal. It’s a good idea not to wait until the last minute to seek quotes on coverages. In the insurance sales portion of my business, I only have three remaining sources that will insure coverages in California. If you’re concerned give me a call to discuss any aspect of insurance coverage and available options.
Some owners have opted to reduce their coverage or even select non-admitted carriers for their insurance and risk violating the terms of their lease agreements. Business insurance is often the poor step-child for the major carriers in States where large profit generator coverages are removed by fire, storm or water. State insurance commissioners have been slow in many States to allow the carriers to increase their premiums to match their perceived risk. The result is a major tragedy drives these insurance carriers from all types of insurance in a particular State.
With the recent increase in Wash/Dry/Fold and pickup and delivery for many laundromat owners the future may hold even higher rates for those engaged in non-self-service activities. Underwriters, so far, have been slow to include the risks of these new activities in their underwriting evaluations and projections of losses. These new activities will have incidents which have not been considered and will result in exclusions or price increases.
The addition of a pickup and delivery service is one area worthy of consideration for insurance coverages. Do you have a written contract or employee manual covering all of their off-premises duties? What is the driving record of the employee making the deliveries? Is your worker driving a company vehicle? If your worker is involved in an at-fault accident what is the liability of the laundromat? Is your delivery worker bonded? What is your liability related to potential theft, damage to property or assault by your employee while on delivery services? What if your driver is found to be intoxicated or under the influence of drugs while involved in a delivery related accident?
Failure to properly define, consider and cover your business risks can leave you with a large exposure to a lawsuit from a customer, employee or worker. Errors can leave you in the non-profit status or worse in the ownership of a laundromat (laundromat definition is a self-service business). Does your current policy cover all of your activities of your business?