What Types of Insurance Does a Car Dealership Need?

A comprehensive insurance policy is essential when running a business or owning commercial property. While getting a standard business property insurance policy may cover some items, it often doesn’t encapsulate all of the coverage a business will need during its time of operation. this is especially true for auto dealers that require more specialized policies. Knowing the different types of insurance a car dealer needs for a car dealer insurance claim can help protect the business when the unexpected happens.

commercial insurance policies for auto dealers

Managing a car dealership requires a great deal of work. These businesses often require long hours and high costs to stay in business. With many moving parts at stake, there are a variety of risks that business owners can face when maintaining a car dealership.

Reading: What kind of insurance does a car dealership need

For example, vandals can break in and damage vehicles, thieves can steal vehicles or parts, or an unexpected hail storm can damage vehicles in the parking lot. These risks to valuable properties are exacerbated if homeowners don’t have adequate insurance coverage, as it can cost them much more in the long run.

Car dealers are not required to insure every car on their lot. rather, they are required to maintain blanket coverage policies covering those vehicles as part of their business property. Because of this, auto dealers must carry various types of insurance policies to protect the business from unexpected property damage.

Some of the most common types of business insurance policies auto dealers need to protect against unforeseen damage include:

commercial property insurance

All businesses are required to carry commercial property insurance. There is always the possibility that a fire, theft and/or vandalism, flood, hail or other disaster could cause damage to the business. With car dealerships, this is of the utmost importance, as cars are often displayed outdoors, leaving them vulnerable to a host of situations that could lead to property damage. Commercial property damage insurance covers damage to physical assets such as equipment, buildings, inventory, and third-party property. can also provide replacement for stolen property or cover costs associated with theft.

dealer insurance

Dealership insurance is a specialized type of business insurance that covers many facets of owning and operating a car dealership. Dealership insurance is designed to cover test drives for dealer-owned vehicles, employees who drive dealer-owned vehicles, and the many potential calamities that could occur at the car dealership. Dealer insurance encompasses many other specific types of coverage, including:

Dealership Open Lot Insurance – This insurance provides coverage for vehicles on a dealership lot that are for sale. In addition, this covers vehicles that may be damaged in an accident or collision and may apply when a car is driven by an employee and/or test drive customers. The dealer’s open lot insurance will also cover the dealer’s losses in certain cases of theft.
Garage Attendant Insurance: This type of coverage insures vehicles owned by a customer leaving their vehicle for repairs against unexpected property damage. this includes coverage for damage from fire, theft, vandalism, extreme weather, and collision damage that may occur on the dealer’s premises.
Garage Liability Insurance – Often used interchangeably with Garage Keeper’s Liability Insurance, Garage Liability Insurance provides a different form of protection for garage dealers. franchised automobiles and related businesses. this specific policy provides coverage for bodily injury and property damage caused by an accident that occurred on the dealer’s premises.

business interruption insurance

Most standard insurance policies only cover loss or damage to physical items, but do not cover loss of profits if an unexpected event puts the business out of business. If a car dealership is vandalized, for example, standard insurance may cover the cost of repairing the damage, but the business will still lose money if it has to remain closed during the repair process. Business interruption insurance helps business owners stay afloat by covering the costs associated with lost revenue and payroll while the business is down.

auto dealer insurance claims attorney

Large and varied risks are common for auto dealers. Because these risks can occur at any time, they should be covered to the fullest extent possible. Since most car dealers operate out of large buildings and keep most of their business value on the showroom floor or open lot, they often face a great deal of risk. however, even with the necessary insurance coverage, business owners operating car dealerships can still face a great deal of difficulty with their insurance providers if a valid claim is not accepted.

At raizner slania, our experienced commercial property insurance claims attorneys can help protect a company’s interests and investments in the event that their insurance company is involved in bad faith practices. If you’re an auto dealership owner and believe your insurer is trying to delay, underpay, or deny a valid property damage claim, contact us today to see how we can help.