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Insurance for Auto Dealers: What You Need to Know to Keep Your Business Safe

Insurance for Auto Dealers: What You Need to Know to Keep Your Business Safe

Call (800) 641-7488 to speak with a live representative

insurance for auto dealers

Insurance for Auto Dealers: What You Need to Know to Keep Your Business Safe

Do you own or manage a car dealership? Here’s what you need to know about insurance for auto dealers to make sure that you’re protecting your business.

Running an auto dealership is full of risks for potential accidents that can occur without proper protection. Consider damages to vehicles, from vandalism or even theft.  But, how do you protect your lot without the ability to insure your vehicles through a general auto policy? You can’t very well insure each individual vehicle without registration, even though you are technically the owner of those vehicles until they’re sold. And, it’s required by law that you have the proper policies in place.

That’s why you need third party liability insurance with a property and casualty policy. This policy will ensure that your entire claim is paid in the event of an accident, whether it be theft, fire, flood, or collision.  If you’re wondering about insurance for auto dealers, then you’ve come to the right place. In this article, we’re discussing everything you need to know. Keep reading to learn more.

Questions to Ask

Before you start shopping for the right policy, it’s important to know what questions to ask to make sure the coverage you get is right for your dealership. It’s a good idea to make a list of the questions you have before contacting the insurer. Some of the same questions you might ask about a general auto policy could come in handy for this purpose.

The first thing you should find out is how much insurance you need and what the premium options are. Make sure the insurance company specializes in insurance for auto dealers before proceeding with the rest of your questions, like how easy it is to change a policy. You can also find out about discounts that may be available.

The most important thing to understand is that each policy will be different depending on your needs. Ask other questions according to the dynamics of your dealership.


There are several aspects to consider when it comes to the type of coverage needed for your dealership. The vehicles on your lot should be insured for any and all incidents that could occur. This includes vehicles that are owned by customers which are on your lot for repair or maintenance.

Loaner vehicles should also be covered under this type of policy, as well as non-owned vehicles that are in your inventory but haven’t yet been listed in your system. You’ll also want to make sure the coverage takes care of accidents caused by employees or customers driving vehicles on your lot.

In short, the coverage you choose should maintain your fleet and any other vehicles that are on your property at all times.


Of course, with a general auto insurance policy, drivers are allowed discounts for maintaining a good driving record. Unfortunately, this isn’t the same scenario for auto dealerships. You will, however, have the opportunity to take advantage of some discounts depending on how you conduct business on your lot.

Background Checks

Performing background checks on your employees is a good way to become eligible for a discount with your insurance company. The insurer will feel more secure knowing that your staff is adept and responsible. Try to avoid hiring individuals with a criminal history or other legal issues.

Employee Training

Employee training is a must if you want your car lot to run smoothly. And, you can also become eligible for insurance discounts if your staff is properly trained. Many insurance companies even offer or provide approved training courses.

You can also develop your own training programs and have them approved by the insurance carrier to qualify for a deeper discount.

Test Drive Routes

One of the easiest ways to get a discount on your policy is to stick to a pre-determined test drive route. Many insurance companies will offer a discount based solely on this protocol because it reduces the risk of accidents due to familiarity.

Choose a route close to the dealership with light traffic patterns to get the best discount available.

Customer Driving History

You can perform driving background checks on your potential customers to lower your risks. And, the insurance company will compensate you for it.

Make it a standard practice to qualify each customer to drive your vehicles before allowing them on test drives.

Securing Property

Theft and vandalism are two of the top risks associated with auto dealerships. It’s important to make sure that your property is secure in order to prevent these occurrences from happening.

The more security features you have on your property, the more likely you’ll be eligible for a discount. Not to mention, your lot will be safer.

Compare Quotes

Now that you know what to look out for, it’s time to get some quotes. Don’t just jump into the first policy you find. It’s important to understand all of the details associated with your policy and shop around to compare quotes so that you can get the best deal.

Besides, one insurer may offer options that another insurer doesn’t which could be beneficial to your business.

Insurance For Auto Dealers

Insurance for auto dealers is a bit more comprehensive than regular car insurance and you need to make sure you have this coverage for the safety of your business. Not to mention staying compliant with the law. Protect your dealership and staff with an insurance policy that’s right for you.

Searching for insurance doesn’t have to be stressful and overwhelming, either. All you have to do is know what questions to ask and be prepared to follow protocols according to the insurance company’s terms and conditions. And, never settle for something that doesn’t feel right.

Remember that your dealership doesn’t need car insurance. You need third party liability insurance to cover the entirety of your operations. Try not to confuse this with commercial car insurance which is also tailored for auto dealers but may not cover your needs.

When you’re ready to purchase insurance for auto dealers, or if you have questions, feel free to contact us. We can get you insured quickly and easily.

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