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Auto Dealerships require a different form of insurance than the standard Comprehensive General Liability Insurance policy found in business insurance. There are endorsements to the policy that allow for things like coverage for test drives, inventory coverage and furnished auto, just to name a few. This Guide to Used Auto Dealership Insurance will go over every aspect of Dealership Insurance to allow you, the business owner, to make an informed decision on what coverages you need on your insurance policy.
What makes us the number one authority for all things Dealership Insurance is our years of experience working with dealerships across the United States and even Canada. We work with thousands of dealerships and several of the largest insurance companies that specialize in Garage Liability Insurance.
Garage Liability Insurance is specifically designed for the automotive industry. The policy can be broken down into three basic components…Auto, Other than Auto and Aggregate.
AutoAuto refers to driving of the dealership inventory. Whether you are driving back to the dealership from the auction or a test drive, the Auto coverage provides liability to others in the form of property damage and/or bodily injury.
Other than AutoOther than Auto is liability to others on the lot. Let’s say a customer slips and falls on the lot. Other than Auto would provide coverage to the customer that fell.
AggregateAggregate is the most an insurance company will pay during the policy period. For example, you have a policy limit of $100,000 on the Aggregate. Someone slips on the lot and the insurance company settles the claim for $75,000. Since the most the insurance company is willing to pay in a policy period is $100,000, any claim going forward would only pay the difference of $25,000. You would be responsible for any damages beyond the policy limit.
Yes, some insurance companies will use the basic general liability policy and add endorsements to provide exposure to the auto side of the business. We find that most of the nationally recognized insurance carriers will use a general liability policy and endorse the policy, while insurance companies that mainly specialize in Dealerships and Repair Shops will use the Garage Liability policy.
Depending on the type of business you own you can have either or both. If you are a Dealership that has no service department and want to cover the dealership inventory then you would choose Dealer Open Lot.
Dealer Open Lot is also referred to as Dealer Physical Damage Coverage. The coverage provides comprehensive and collision to owned vehicles of the dealership. This coverage will provide protection against loss such as weather, theft and collision.
If a claim occurs the insurance company will pay for the Actual Cash Value (AVC) of the vehicle minus any deductible. It will not cover the cost that you were going to sell the vehicle for on the lot.
Garage Keepers Insurance is used when you service customers' vehicles. The coverage provides protection while you are in the care, custody and control. For example, after servicing a customer’s vehicle your mechanic takes it on a test drive and gets into an at-fault accident. The Garage Keepers policy would pay for the damage done to the customers vehicle minus the deductible.
In the Video below Krystal Jackson, VP describes the three different options you can choose from when selecting Garage Keepers Insurance.
Furnished Auto - A Furnished Auto endorsement can be added to the policy to allow you or an employee to use the dealership inventory for your personal use. This coverage is popular for owners of dealerships who don’t have personal vehicles and use the dealership inventory for personal use.
Click on our Blog to Learn more about the Benefits of a Furnished Auto Endorsement
Medical Payments - Can be added to the auto and the dealership premises. Coverage provides medical coverage for customers injured on the premises.
Uninsured Motorist - If you or one of your employees is injured in an at-fault accident caused by another driver that does not have sufficient bodily injury limits, uninsured motorist bodily injury we step in to provide additional medical benefits.
Commercial Property - If you own your building then a commercial property can be put into place to provide protection against fire, theft or weather related accidents.
Workers Compensation - As the employer you are liable if an employee has an accident while in the course of work at the dealership. Workers Comp will help cover any medical cost associated with the injury up to policy limits.
Auto Dealers Errors & Omissions - Lawsuits can be costly and if you or your employees misrepresent your vehicles history can could be held financially liable. Errors & Omissions would help cover the financial cost.
There are a lot of moving parts to Auto Dealer Insurance and if you are not working with the right insurance agency could could be held liable for things that you are not aware of that aren’t covered. Barbee Jackson Insurance has a dedicated team of Dealership Specialists ready to work with you to find the best coverage at the right price.
Call to speak to one of our agents today to get a dealership quote (850) 389-2001