Car Dealership Insurance

An Overview of Car Dealership Insurance

All businesses benefit from having insurance policies to protect their inventory, workers, and property. Car dealership owners in particular need to carefully select an insurance policy that fits their needs. If you are starting up a dealership, you will want to be in touch with an insurance broker to discuss different policies and coverage. It may sound unintuitive, but car dealerships do not generally buy car insurance for the individual vehicles on the lot – instead, they buy car dealership insurance policies that cover their inventory more broadly.


What Your Car Dealership Insurance Should Cover


State laws require that registered cars have car insurance. As the cars in your dealership lot are not registered to a specific person, they are not required to have insurance. However, the cars are still at risk for damage from a variety of sources. It is important to get a policy that specifically covers scenarios that could result in damage to vehicles on your lot. Some of the situations that should be covered include:


  • Cars owned by customers that are on your lot for maintenance
  • Vehicles you lend out to customers
  • Accidents caused by customers or employees driving dealer vehicles in your lot
  • Accidents caused by employees driving customer vehicles


How to get the Best Coverage


There are a few steps you can take as a dealer to increase the chance of getting a high quality insurance policy. Ensuring that background checks are performed on all employees is important for getting approved for insurance. In addition, providing specific training for employees can often result in a better rate. Provide a specified test drive route to reduce the risk of accidents. Of course, providing security for the vehicles in your lot is the best way to keep them safe. However, in case something does happen, having a solid car dealership insurance policy is the best way to ensure the longevity of your company.


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