Nick Pacifico has been working at his family’s Cadillac dealership in Denver since 2003. He’s never seen insurance costs this bad. “Getting coverage is nearly impossible,” said Pacifico, vice president at Rickenbaugh Automotive Group. Two years ago he paid about $160,000 to insure $20 million worth of Cadillacs and Volvos on his lot, where about a third of the inventory is kept outside. This year he’s paying almost $600,000.
Pacifico is not the only one. Hail is wreaking havoc in the market for auto dealer lot insurance. In 2018, Zurich North America, one of the major commercial auto insurance providers, decided not to renew policies with hundreds of dealerships throughout the middle of the U.S., citing “catastrophic” losses due to hail damage. (In a statement, Zurich said it remains one of the largest providers for auto dealers, including those in hail-prone states.) “Everybody that I know is faced with a very expensive change,” said David Ditgen, who worked at Zurich for 15 years and is now a broker at AutoRisk Dealer Financial Services in Denver.
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