Insurance For Independent Auto Dealers

Insurance Policies to Consider For Independent Auto Dealers

1. Garage Liability Insurance

Garage liability insurance is specialty insurance that provides coverage for property damage as well as injuries resulting from business operations. It is an umbrella policy that covers the daily operations of businesses operating in the automotive industry.

Coverage mainly includes injuries sustained by customers while on your business premises. Many policies also cover employee dishonesty provisions for acts of vandalism or theft by an employee to a customer’s car. You can also include vehicles used for business, such as delivery trucks and courtesy plans. 

Now let’s take a look at things that garage liability insurance will not cover. Building, tools, and business or personal property are typically not included in the policy. Plus, it does not provide protection for stolen property, vandalism, or property damage due to natural occurrences, such as hail or flood. Before buying the insurance policy, make sure you ask your insurance provider to provide a complete list of things included and not included under the policy. 

Here it is important to mention that most business liability and commercial insurance plans do not cover property damages or injury from a direct garage operation. Hence, garage liability insurance becomes necessary for non-franchise auto dealers who want to add an additional protection layer. However, keep in mind that this kind of insurance merely adds to the basic liability coverage – not replace it.

2. Dealers’ Open Lot Insurance Coverage

For auto dealers, the risk of physical damage to the total inventory of vehicles is very real and always present. Physical damage to vehicles can be caused for a number of reasons, including fire, vandalism, malicious mischief, accidents, theft, and even natural forces such as hail, flood, and strong winds.

Vehicles covered under the insurance policy include private passenger vehicles, such as cars, pickups, minivans, SUVS, etc. However, Dealers’ Open Lot insurance coverage is not limited to private passenger cars. You may also receive coverage for RV units or any other vehicles that are held in the inventory with the intention of sale.

Dealers’ Open Lot insurance for non-franchise auto dealers can provide blanket coverage to dealers against most – if not all kinds of physical damage to the fleet of vehicles. It also goes by the name of Physical Damage Coverage.

It is important to understand that insurance companies often offer varying policies as the policy is open to interpretation. This makes it important to explore your options and work with a reliable insurance company that offers tailored and cost-effective insurance solutions.

3. General Keeper's Insurance Coverage

As an independent auto dealer, you will often find yourself looking after vehicles that you do not own. Garage Keeper’s Insurance provides coverage for vehicles that are not part of your inventory but are under custody or care. This kind of insurance is often considered to be an optional coverage endorsement meant to protect your clients’ goods and vehicles while they are under your protection.

However, it is vital for most businesses operating in the automotive industry, especially small businesses dealing with automotive services. It can save you some major expenses and even protect you against legal claims down the road. 

Another reason why Garage Keeper’s Insurance is a must for non-franchise auto dealers is that it is a comprehensive policy that provides diverse coverage for more than just overturns and collisions. First of all, it ensures protection against legal liabilities and provides coverage against damaged caused due to negligence. For example, let’s say your mechanic accidentally damages a customer’s car during a test drive. Garage Keeper’s Insurance can come to your rescue in such cases.

Similarly, this type of insurance can cover you if a customer’s vehicle or goods are damaged due to theft, vandalism, or extreme weather conditions, such as hail, rain, strong winds, floods, etc. Regardless of who might be at fault, a Garage Keeper’s Insurance policy can cover the damage as long as the vehicle is kept protected. Again, take the time to discuss the insurance plan with your service provider in detail to make sure you understand all the nitty-gritty.