Auto dealer insurance is the backbone of a safe and profitable dealership. Whether you sell new cars, used cars, or run a repair shop alongside sales, the right insurance keeps your business protected from costly risks.
What Is Auto Dealer Insurance?
Auto dealer insurance is a specialized package designed for car dealerships. It includes several types of coverage in one plan, protecting your inventory, property, employees, and customers.
Why Your Dealership Needs Auto Dealer Insurance
Running a dealership comes with daily risks—customers may crash during test drives, storms can damage your lot, or thieves might target your vehicles. Without coverage, one major incident could drain your finances.
Main Types of Auto Dealer Insurance Coverage
Garage Liability Insurance
Covers bodily injury or property damage caused by dealership operations, like accidents during test drives.
Dealer’s Open Lot Coverage
Protects your entire inventory from theft, vandalism, fire, and severe weather.
Garagekeepers Liability
Covers customer vehicles while they are in your care for service, detailing, or repairs.
Workers’ Compensation
Pays for employee injuries, medical care, and lost wages if someone gets hurt on the job.
Business Property Insurance
Covers buildings, equipment, computers, and furniture from fire, storms, or theft.
Cyber Liability Insurance
Protects your dealership against losses from hacking, data breaches, or online fraud.
Surety Bonds
Required in many states to legally operate as a dealer, ensuring compliance with sales laws.
Cost of Auto Dealer Insurance
Smaller dealerships may pay $300–$600 per month, while larger lots with high-value inventory can spend several thousand monthly.
Factors Affecting Premiums
Location, inventory value, claim history, safety measures, and the type of vehicles sold all influence insurance costs.
Why Auto Dealer Insurance Rates Are Rising
Car values, repair costs, and theft rates have been climbing, leading to higher premiums nationwide.
How to Lower Your Auto Dealer Insurance Costs
Improve security, hire experienced drivers, bundle policies, maintain a clean claims record, and compare quotes regularly.
Common Auto Dealer Insurance Claims
Theft, hail damage, customer injuries, and accidents during test drives are the most common claims dealerships face.
Choosing the Best Auto Dealer Insurance Provider
Pick an insurer with dealership experience, flexible policy options, and fast claims service.
Documents Needed for an Insurance Quote
Have your dealer license, employee count, inventory list, and claims history ready before applying.
Auto Dealer Insurance Checklist
Check state requirements, review liability limits, ensure full inventory coverage, and consider cyber protection.
Conclusion
The right auto dealer insurance keeps your business secure, your employees safe, and your customers confident. It’s more than a legal requirement—it’s an investment in your dealership’s long-term success.
