After being hammered by hail over the past two summers, some local car dealerships are taking measures to protect themselves. A hailstorm on June 28, 2016 left chaos in its wake, with flooded streets, damaged trees, and many dented vehicles throughout town. Similar storms have taken their tolls on the car sales business over the past two years, causing significant damage on outdoor vehicle lots. Before the storm season of 2018, shelters were erected over inventory at Okotoks Nissan and Okotoks GM. “It’s strictly because the cost of hail insurance has become astronomical,” said Mickey McGarvie, general manager at Okotoks Nissan. About 80 per cent of the dealership’s inventory is under the shelters, he said. It cost about $250,000 to install the covers on the lot, but it will pay for itself in about eight to 10 years in the number of claims Nissan won’t have to submit to insurance and damage sales, he said. After a large storm, adjusters will visit a car lot and provide an estimate for the cost of repairs on each vehicle through the insurance company, he said. Most people tend to opt for saving money on a damaged vehicle, he said. “We’ve found people have started to expect big ‘hail sales’ as soon as hailstorms come through, because dealerships are looking to unload or repair damaged inventory,” said McGarvie. Okotoks Honda has also taken measures to protect its vehicles. “We’re in the process of building permanent hail structures,” said sales manager Jacquie McPhail. “I believe we’re going to be one of the first dealerships in western Canada, if not Canada, that’s going to have permanent solar-powered hail structures.” The structures will protect about 80 per cent of Honda’s inventory and also help power the dealership and reduce its overall environmental footprint, she said. They are currently being built and are expected to be in place by the end of August. In the meantime, most vehicles are being stores at an off-site compound outside of town to keep them out of harm’s way, she said. It’s worth the cost of construction to save dollars in the long run, she said. Dealerships pay for “floor planning” – holding inventory on-site through manufacturers – and insurance on the vehicles as well, she said. The more damage claimed, the higher the deductibles and premiums become. “There’s cost involved, which we and all the other dealerships in town have seen over the last three years,” said McPhail. “We’ve seen multiple storms that have provoked us to go this way. “It makes sense for us to spend a little bit more now to save in the long run, to save our inventory for our clients as well.” According to the Insurance Bureau of Canada (IBC), hailstorms result in millions of dollars in insured losses in Alberta. In 2012, severe storms cost more than $700 million and in 2011 there was more than $380 million in damage claims. The most dangerous time of year on the prairies is between June and September, when severe storms are most likely and may carry hail. In addition, the frequency of these storms is on the rise, according to the IBC website. For more information visit www.ibc.ca.
