Repossession Insurance Alaska Policy Information
Repossession Insurance Alaska. A century ago, cars were new, exotic, and considered a luxury. As times have changed, however, automobiles have practically become a necessity in many localities. Even though vehicles have become more accessible to greater numbers of people in recent times, there is no doubt that cars remain a serious investment - and many buyers rely on car loans to fund the purchase of a vehicle.
Automobile repossession companies are hired by banks and other financial institutions to recover vehicles when borrowers are delinquent in making payments.
Some lenders require the vehicles they finance to have electronic disabling devices that keep the vehicle from starting once a payment is late. Others install GPS devices to aid in location should the need for repossession arise.
The lender has the right to claim the vehicle at any place and at any time without providing any notice to the borrower but must do so based on the laws of the state where it operates. In some states, the payment can be as little as one day late to warrant repossessing the vehicle.
Any personal items in the vehicle at the time it is recovered must be set aside, secured, and returned to its owner. Recovered vehicles may be stored in a garage or an open lot outside the building. The recovery company may sell the vehicle on behalf of its lender client.
When buyers default on those car loans, automobile repossession companies - also often called "repo companies" - have the responsibility of recovering the property that, ultimately, still belongs to the lender.
While these companies can certainly expect to be kept busy, the fact remains that automobile repossession companies also face a range of risks, each of which could jeopardize their financial future. What types of repossession insurance Alaska might repo companies need to carry to protect themselves?
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Why Do Alaska Repossession Companies Need Insurance?
Each business, regardless of its branch of commerce, faces a number of hazards. While some risks apply to every field, others are industry-specific. Repo companies have to take both into account when deciding how to shield themselves from significant financial setbacks.
No company with physical assets is immune to perils such as acts of nature (earthquakes, floods, wildfires, for instance), vandalism, theft, or accidents. In every industry, important equipment can also break down suddenly, requiring urgent repair or replacement.
Employees also face significant occupational risks - when a car is repossessed, all personal belongings must be taken out of the vehicle. Sometimes, that's an easy job. Agents may also, however, encounter dangerous objects, and sometimes even drugs and syringes, which puts their health at risk. An an employer, you can be held liable for such occupational injuries.
The risks are many, and often, you will not see them coming. In some cases, a major peril can even force your company into bankruptcy. That is why it is so vital to protect yourself with a comprehensive repossession insurance Alaska plan.
What Type Of Insurance Do AK Repo Businesses Need?
There is, unfortunately, no such thing as a universal commercial insurance plan that would meet the needs of all automobile repossession companies. Each company is unique.
Your number of employees, the volume of cars you repossess, the geographical location and AK legal jurisdiction of your company, are all examples of factors that influence the kinds of coverage you may need.
For this reason, it is essential to consult a commercial insurance specialist and discuss your risk profile in-depth. Together, you'll be able to craft the comprehensive insurance plan that will have your back no matter which peril you may be impacted by.
Having said that, among the most important types of repossession insurance Alaska that repo companies should be aware of are:
- Commercial Property: This type of insurance shields your company from financial losses caused by damage to or loss of commercial property as a result of perils like acts of nature (hurricanes, floods, earthquakes), vandalism, or theft. It covers your building, but also smaller assets, such as computers, that are present on the property.
- Commercial General Liability: In case your business causes damage to third party property (such as equipment you rent), this type of repossession insurance Alaska will cover your legal and related costs. It also protects you in the event of a bodily injury claim resulting from an incident that took place on your premises or as a result of your activities.
- Bailee's Liability: As an automobile repossession company, you temporarily take custody of vehicles that you then return to their legal owners. Should vehicle be damaged or lost while in your custody, this type of insurance helps you manage the costs.
- Workers' Compensation: Car repossession employees face a range of occupational health hazards. This type of insurance covers the medical expenses in the case of an unfortunate event, as well as the lost income of the affected employee.
The automobile repossession industry is thriving, but the fact that it faces numerous perils is inescapable. Sometimes, even a single mishap can lead to massive costs. While the types of repossession insurance Alaska covered here will go a long way toward protecting your business, you may have additional insurance needs.
Make sure you are fully covered, by discussing your individual circumstances with a commercial insurance broker.
AK Repossession's Risks & Exposures
Business auto exposures are high because of the methods used to recover vehicles. Tow truck operators often must act quickly and surreptitiously to remove the vehicle before the borrower returns. This could result in improperly attaching the recovered vehicle to the tow truck.
The vehicles may be required to operate quickly in parking lots and other areas where children and other persons may be present, resulting in bodily injury, or damage to other vehicles. Some vehicles may be driven away instead of being towed, presenting non-owned exposures.
All employee drivers should have valid licenses with their MVRs regularly checked. Random testing for alcohol and drug use should be required. All owned vehicles, especially hoists and tow bars on tow trucks, must be regularly maintained with records retained.
If clients' vehicles are kept on the repossessor's premises, garagekeepers coverage will be needed. Keys to these vehicles should be kept in a locked box inaccessible to non-authorized employees.
Premises liability exposures are minimal because of lack of public access to the office and the garage or open lot where the recovered vehicles are stored. Vehicles stored in the open may be an attractive nuisance to children or other trespassers.
Off-site exposures include damage to borrowers' premises or personal property.
Personal injury exposures include allegations such as assault, battery, discrimination, and invasion of privacy. Policies concerning employee conduct should be established with periodic training provided. There is product liability exposure if the recovery company sells repossessed vehicles for its customers.
Professional exposures may be present, based on specific state licensing and certification regulations.
Workers compensation exposures are high. Employees should be properly trained and supervised. During the repossession process, borrowers may threaten and physically attack employees. Procedures to avoid and prevent confrontations must be in place. Weapons should not be permitted.
The lifting of a vehicle by hoists or other mechanical means can result in injury if the equipment malfunctions. Workers can slip and fall, incur back injuries, be attacked by pets or other animals, or be involved in automobile accidents.
Property exposures are moderate and include an office and a garage or open lot where the recovered vehicles are kept. Ignition sources include electrical wiring, heating, and air conditioning systems. Gasoline, oils, and lubricants inside stored vehicles increase the fire hazard. Oily rags should be kept in National Fire Protection Association (NFPA) approved metal containers to prevent spontaneous combustion.
Recovered vehicles can be targets for theft and vandalism from angry borrowers or other trespassers. Appropriate security controls must be taken, including physical barriers such as fences or gates, lighting to deter access to the premises after hours, and an alarm system that reports directly to a central station or the police department.
Coverage on the property of others is needed because all personal property inside recovered vehicles must be returned to its owner. An inland marine bailees form may also provide this coverage.
Inland marine exposures include accounts receivables from client banks and other financial institutions, computers used to track, monitor, and sell recovered vehicles, and valuable papers and records for all orders for recovery and vehicle titles. Duplicates should be kept off-site to allow for re-creation following a loss. A bailees form may be needed to cover the personal property of others inside the recovered vehicles.
Crime exposures include employee dishonesty for the individuals who recover the vehicles, office employees, and persons who sell the vehicles on behalf of the financial institution. Background checks should be conducted on all employees handling money or recovered vehicles.
There must be a separation of duties between persons handling orders, deposits and disbursements and reconciling bank statements. Endorsements are needed to cover employee theft of customers' property because the vehicles do not belong to the repossessor.
Repossession Insurance Alaska - The Bottom Line
To protect your repo business, employees and the people you serve, having the right repossession insurance Alaska coverage is important. To learn what types of policy options are available to you, how much coverage you should invest in and the premiums - speak to a reputable commercial insurance broker.
Alaska Economic Data, Regulations And Limits On Commercial Insurance
If you're an entrepreneur who is thinking about starting a business in Alaska, it's important to have a basic understanding of the state's overall economy before you set up shop. Regardless of how high-quality the products and services you are planning on offering may be, if the location where you open your organization doesn't offer a target market that your products and services will appeal to, chances of success are slim. Furthermore, if a workforce isn't available to support your business, you'll have a hard time staying afloat.
With that said, it's important for business-minded individuals who are thinking about starting a company in Alaska to familiarize themselves with the state's economy; it's also a good idea to have an understanding of the commercial insurance requirements.
Following is an overview of economic trends and commercial insurance policies that business owners are required to carry in The Last Frontier.
Economic Trends For Business Owners In Alaska
According to the Bureau of Labor Statistics, the unemployment rate in Alaska was 6.1% in December of 2019. While that's significantly higher than the national unemployment rate, which was 3.4% in December, 2019, it's lower than it was one year prior, when the rate of unemployment was 6.5% in December of 2018. Though the workforce is growing slower than it is in other states, economists do predict that the rate will continue to decline in the coming years.
Despite Alaska's remoteness and cold climate, it's actually a great start to start a business. According to the Tax Foundation, Alaska is the second most tax-friendly state for business owners in the United States, as there's no individual income tax or state sales tax. Additionally, Alaska has the second highest rate of new business owners, as well as the second highest percentage of available employees (as per 2016).
As in most states, the best spots to start a business in Alaska are the state's biggest cities and the surrounding areas. This includes Anchorage, Juneau, and Fairbanks. Other key areas that are seeing a boost in business development in recent years include Homer, Sitka, Prudhoe Bay, and Ketchikan.
While there are several industries that are experiencing growth in The Last Frontier, specific sectors thrive more than others. Businesses that are related to the following industries are booming in AK:
- Fishing, which is also one of the largest contributors to the state's economy.
- Mining, which provides more than 4,500 jobs in Alaska.
- Petroleum, which is responsible for 34% of jobs in the state. In fact, Prudhoe Bay is North America's largest oil field.
- Tourism is the second largest private sector employer in the state. Each year, millions of people from around the globe travel to Alaska to marvel at the numerous natural wonders that can be found here.
Commercial Insurance Requirements In Alaska
The Alaska Division of Insurance regulates insurance in AK. Alaska mandates very few forms of insurance coverage by law. They enforce worker's compensation.
Alaska requires you to have worker's compensation insurance if you hire even one employee on a regular basis. This includes part-time employees, family members, minors, and immigrant employees. It is not required for independent contractors or domestic employees, though you should check to make sure any contractors you have are true contractors, and not employees.
Alaska also requires all business-owned vehicles to be covered by commercial auto insurance. Other types of business insurance that business owners should carry depend on the specific industry.
Additional Resources For Commercial Auto Insurance
Learn about small business commercial auto insurance which includes liability and physical damage protection for vehicles that are used for business purposes.
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The person injured in an vehicle accident may be a child, a wage earning single parent, a brain surgeon, or even a homeless person. The costs of the accident may be relatively small or run into the millions of dollars, depending on the victim and his or her injuries. Do you have the assets to handle such costs?
Trucking operations in this chapter are among the most heavily regulated in the country. All are subject to multiple types of regulation including municipal, state and federal. The regulations are necessary because potential for severe property damage and/or bodily injury is extremely high.
All carry cargo that if not handled appropriately could have serious consequences to the cargo owner and/or the public at large. Those that carry people must prove that they keep their equipment in good condition and that employees operate in a safe, sober manner.
The insurance company pays amounts an insured is legally obligated to pay as damages because of bodily injury or property damage and certain types of pollution events covered by this insurance caused by an accident and resulting from ownership, maintenance or use of covered vehicles.
The obligation to pay is triggered only by accidental occurrences involving vehicles covered under the Business Auto Coverage Form. An eligible pollution event is covered only if it is connected to a covered bodily injury or property damage loss.
It is important that you have the proper Limit of Insurance to protect your operations. This limit is the most the insurance company pays for the total of all damages, including any covered pollution cost or expense resulting from any one covered accident, is the Covered Auto liability limit of insurance on the declarations.
This limit applies regardless of the number of insureds, autos covered, vehicles involved in an accident, premium paid, or number of claims made.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Accounts Receivables, Computers, Motor Truck Cargo, Valuable Papers and Records, Employee Dishonesty, Money and Securities, General Liability, Employee Benefits, Umbrella, Motor Carriers Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Mobile Equipment, Signs, Warehouse Operators' Legal Liability, Cyber Liability, Employment-related Practices, Environmental Impairment, Underground Storage Tank, Stop Gap Liability and International Coverages.
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Also find Alaska insurance agents & brokers and learn about Alaska small business insurance requirements for general liability, business property, commercial auto & workers compensation including AK business insurance costs. Call us (907) 531-9001.