Serving ARA members
By Wayne Walley

Serving ARA members

ARA Insurance focuses only on the equipment and event rental industry

John Kennedy, CPA
John Kennedy, CPA

John Kennedy, CPA, president, ARA Insurance, Overland Park, Kan., a subsidiary of the American Rental Association (ARA), recently answered questions from Rental Management about the impact of natural disasters and other issues on the insurance industry, the growth of ARA Insurance and the outlook for 2023.

Rental Management: How does a devastating hurricane, such as Hurricane Ian, impact the insurance market overall and specifically ARA Insurance?

John Kennedy: The financial impact of Hurricane Ian is still being calculated, but estimates range from $50 billion to $75 billion of insurance losses. Natural disasters have definitely been on the rise in recent years. The higher frequency of natural disasters along with the resulting losses drive property insurance rates up in the U.S. and across the world. We see some impact to this, but for the most part we have been able to maintain more stable rates than the market. The ARA Insurance program is structured with reinsurance for natural disaster losses so that has helped minimize large rate swings.

Rental Management: ARA Insurance was founded by ARA in 1977 and built a steady business over the next 40 years. There continues to be an increase in the number of clients using ARA Insurance over the last few years. Why is this happening?

Kennedy: We continue to see growth in the number of members we insure. I believe this growth is a result of the trust we have earned with ARA members over the years. Serving our members is at the very heart of our mission and we are always looking for new and better ways to do so. I also believe our insurance and risk management products are second to none in the equipment and event rental industry. As ARA Insurance grows, it benefits the rental industry and ARA as we are proud to give back to ARA in the form of sponsorships and funding risk management initiatives.

Rental Management: What is the most frequent type of claim ARA Insurance received in 2022 and how can rental stores do a better job to reduce these risks?

Kennedy: As in previous years, auto-related claims were by far the most prevalent in 2022. Over the last several years, there has been an increase in drivers on the road and more opportunities for distracted driving, such as cell phone usage and more. Both of these factors lead to more accidents. On the other hand, vehicles these days are more sophisticated with certain safety sensors such as backup cameras. These devices have proven to reduce accidents in a meaningful way and may somewhat mitigate the risk of distracted driving. I encourage members to take advantage of the risk management resources offered around safe driving as part of their ARA membership. A good place to start would be the newly revamped Professional Driver Education Program (PDEP) as well as the Box Truck Training Program offered online through ARA’s RentalU.

Rental Management: What is your best advice that can help rental stores potentially limit the cost of insurance premiums?

Kennedy: It starts with a rental store owner running a good operation which minimizes costly accidents. This begins with hiring good people and creating a culture of safety for employees. Training of your staff in this culture is extremely important. Utilizing a written rental contract with your customers is another way to protect your rented equipment from damage or losses. There are many resources provided by ARA or ARA Insurance to help improve your safety and risk management processes.

Rental Management: Why should an ARA member use ARA Insurance instead of other companies that offer coverage to those in the equipment and event rental industry?

Kennedy: ARA Insurance is truly a member-directed company looking out for the best interests of our insured members. The ARA Insurance board of directors is made up of ARA members. Providing insurance services to ARA members is all that ARA Insurance does, so we are completely committed on being experts in insuring those in the equipment and event rental industry. With other insurance companies, the rental industry normally is a small piece of what they do so they likely do not invest much in understanding the risks. Our ARA Insurance Preferred Agent network has decades of experience in the equipment and event rental industry and are able to advise members on both insurance and risk management best practices. 

Wayne Walley

Wayne WalleyWayne Walley

Wayne Walley is the publisher of Rental Management. In his career, he has profiled hundreds of celebrities and business leaders. Outside of work, he is an avid long-time collector of breweriana and pop culture items that he sells through his wife’s retail gift shop in LeClaire, Iowa.

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