Auto Insurance for Dealers
Auto insurance companies offer special fleet coverage policies to auto dealerships. Commercial used car dealer insurance can cost up to $20,000/yr.
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UPDATED: May 26, 2022
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- There are certain critical policies car dealers must have
- Several auto insurance companies specialize in selling auto insurance products to car dealers at reasonable rates
- If you are a car dealer and you are looking for coverage, you need to check with various providers and compare quotes
- In most U.S. states, your insurer is supposed to submit a certificate of insurance to the state’s department of motor vehicles
Just like any other individual in the U.S., car dealers need auto insurance to drive legally on U.S. roads. On top of that, car dealers are required to meet other special insurance requirements that come with the business. State laws dictate that all registered vehicles have to be insured.
As a car dealer, you own all the vehicles in the dealership’s parking lot, technically speaking. Therefore, it is your legal obligation to make sure that they are all insured.
Purchasing individual coverage for each vehicle would be expensive, so auto insurance companies resort to the sale of special fleet coverage policies to car dealers.
To get the best car dealer auto insurance at the best market rates, you need to compare quotes from many of the top auto insurers.
Ask your insurance agents about available discounts and their qualification requirements and get to save money on your monthly premiums.
Key Coverage for Car Dealers
Garage Liability Insurance
Car dealers need to be protected from property damage and bodily injury claims arising from liable incidences. Garage liability coverage will take care of such claims. Often, garage liability coverage is required by the state before appropriate licenses are issued.
In most cases, garage liability is sold in two forms of policies:
- Claims made policies – pay for claims filed in the course of the policy i.e. during the specified policy period or extension period regardless of when the particular incident happened.
- Occurrence policies – on the other hand, pay for property damage or bodily injuries resulting from incidences that happen during that particular policy period only.
Garage liability is a combination of premises and vehicle insurance and is required by the DMV before the issuance of an operating license.
Popularly referred to as dealer’s open lot coverage, a physical damage policy covers the dealer from losses arising from incidences such as fire, vandalism, theft, collision, and natural disasters.
This coverage is designed to protect the dealer from the loss of owned vehicles, usually held for sale.
It is important as a dealer to read and understand the terms of the policy, what’s covered and what isn’t. In most cases, this type of coverage will cover losses from a collision, as well as other specified perils.
Often, auto insurance carriers will throw in a comprehensive coverage in the policy, too.
- Collision coverage means that the policy will pay for all damages arising from collision-related incidences.
- Specified perils cover incidences specified in the policy such as damage by fire, theft cases, vandalism, and weather-related damage. In some cases, this coverage is simply referred to as fire and theft.
- Comprehensive coverage, in this case, covers pretty much anything else not specified in the policy.
You can extend the policy to cover all the vehicles in your lot including vehicles in consignment as well as those under a floor plan.
The policy will carry a deductible for each vehicle, which is to be deducted from the total claim amount in the event of the occurrence of a covered incident.
This type of coverage provides your employees with medical benefits and wage replacement in case of personal injury at work. As a car dealer, you should make sure that your employees are properly taken care of in the event of a work-related injury.
With the high number of vehicles coming and going, an accident is bound to happen. Make sure your employees are protected from any of the following incidences:
- Accidents when driving customers’ vehicles
- Getting injured while load or unloading a fleet of cars from a truck
- Getting hit by any of the many vehicles going in and out of the dealership
- Accidents when test-driving company’s unregistered cars
Carrying this business insurance will help your employees with any medical expenses and loss of income.
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Car dealers are required to post a surety bond before the issuance of a license in most states.
The surety bond guarantees the state that the car dealer will observe all the governing the sale of motor vehicles in the state.
Also, the surety bond is used as a financial instrument ensuring compliance with the terms of all the written agreements pertaining to the exchange or sale of motor vehicles in a given state.
In actuality, a surety bond is not an insurance policy. A surety bond is a contract between the dealer and the state showing the dealer’s ability to settle a loss up to the penal aggregate specified in the bond.
An occurrence of a loss, in this case, refers to situations where the dealer acts in a somehow unethical manner or breaks the terms of the contract.
Fleet Car Insurance for Auto Dealers
Fleet car insurance provides a motor vehicle dealer with an opportunity to cover all the vehicles the dealership owns under one policy. A business that owns 3 or more trucks, cars or vans can check out fleet car insurance.
This type of auto dealer insurance is flexible and convenient; it’s easy to add or remove vehicles from the policy. Premiums can be paid annually, semi-annually, quarterly or monthly.
Auto insurance companies like it when payments are made in one or two payments in a year, and you may get a discount if you do that. You can tailor the policy to meet your personal and financial needs.
Car dealers need protection in the form of auto insurance whether they are driving their personal cars or at work. Your best bet is always to compare rates when it comes to auto insurance.
Get an insurance quote today for the necessary auto insurance products at reasonable rates and stay safe. Compare rates today to see how much you could save on auto dealer insurance coverage.