Written by: Krystal Jackson, President and head of the garage team at Barbee Jackson Insurance.

Dealership can be complicated for most insurance agencies because they simply don’t write enough car dealers to understand the coverage options. That’s where Barbee Jackson Insurance steps in! 

Our Agents and Customer Support Staff are trained to handle any type of dealership or garage operation across the United States. Join more than 2,000 dealerships that trust Barbee Jackson Insurance with their insurance needs. Call today (850) 389-2001

North Carolina Dealership Insurance Requirements

The required amount of insurance according to the North Carolina Department of Transportation Division of Motor Vehicles is a surety bond in the amount of $50,000 and $25,000 for each additional location.

The price you can expect to pay yearly for the auto dealer bond is about $500. This is based solely on your credit score, so the lower your credit score the higher you will pay.

North Carolina Garage Liability Insurance

The Division of Motor Vehicles does not require a Garage Liability policy to be registered with the state, but that doesn’t mean you don’t need this type of policy. Policies are affordable and start as low as $1,100 per year.

What if…

• What if you get into an at-fault accident with one of the dealership vehicles? 
• What if someone slips and falls on the lot?
• What if a catastrophic event happens and you lose your inventory?

These “What ifs” happen everyday to hundreds of dealerships across the United States and without the proper insurance you could be out thousands of dollars! Garage Liability Insurance is designed to protect you from these “What if” scenarios. The coverage breaks down to three key areas…Auto, Other than Auto, and the Aggregate.

• Auto - Auto refers to the dealership inventory and provides liability coverage to others in the event of an at-fault accident. The coverage combines both bodily injury and property damage under a combined single limit (CSL). 
  One example could be after purchasing an auto at auction you accidentally hit another vehicle. The Auto coverage would pick up the vehicle damage and bodily injury to the injured party.
  Another example that happens frequently is during a test drive the driver hits another vehicle. The Auto coverage would step in to pay for the other party’s damage up to policy limits.
• Other than Auto - Other than Auto is coverage for the lot. It works like a usual General Liability policy providing coverage for slip and falls that occur on the lot.
• Aggregate - The Aggregate is the most the insurance company will pay in a policy period.

Dealer Plates

To move inventory around and for test drives the vehicle must have a Dealer Plate. During the application process your agent will ask you how many dealer plates will the dealership need. Once the policy is started we will issue you a Certificate of Insurance (COI). The COI holder is the North Carolina Department of Transportation, Division of Motor Vehicles and the COI will indicate how many dealers plates.

What About the Inventory? What protects that?

The inventory is covered by an endorsement referred to as Dealer Open Lot (DOL) also referred to as Dealer Physical Damage. DOL provides coverage to the dealership inventory in the event that one or more of the vehicles is damaged. 

An example that happened recently (2023) was one of our dealers suffered extensive damage to all the vehicles on the lot when baseball sized hail battered the inventory. The owner paid the lot deductible and the insurance company paid to repair or replace the damaged vehicles.

Does the Dealership have a Services Department?

If so, then Garage Keepers Insurance could be put into place to cover customers' vehicles. Garage Keepers Insurance provides financial protection when you are in the care, custody and control of a client's vehicle.

For example, after your technician finished serving a customer's vehicle he/she took it out for a test drive. The technician got into an at-fault accident. Garage Keepers Insurance would pay to fix the customer's vehicle

Other Common Coverages

• Commercial Property
• Business Personal Property
• Commercial Auto Insurance
• Workers Compensation
• Cyber Liability

Frequently Asked Questions

Does garage liability cover test drives?
Yes, garage liability insurance covers customer's test driving a vehicle on the lot. It is coverage for liability only unless you add Dealer Open Lot to the policy.

I own the dealership and want to take a vehicle from inventory home at night, is that allowed?
Yes, owners and designated employees are allowed to take a vehicle from inventory home or for personal use as long as each driver has a furnished auto endorsement. Furnished auto endorsement allows the inventory to be used both for business and personal use.

Do you insure wholesale dealers?
Yes, we have programs for both wholesale and retail dealers.

I want a dealer plate for every vehicle on the lot?
This depends on how many vehicles are on lot. If you have only three vehicles then yes. Insurance companies in general will let you have three dealer plates per employee.

Barbee Jackson Insurance

Dealership insurance can be complicated and without the right team of experts handling your account you could be out thousands of dollars because of missing coverage. Call the team at Barbee Jackson Insurance to experience the difference! (850) 389-2001