For car guys and gals,
insurance is a lot like compliance; we hate to deal with it, but we know we
Those who have been
operating for a number of years have a pretty good idea of what they need to
look for in a garage policy and generally shop their coverage annually.
For those that are new to
the business or haven’t dealt with the insurance side of things much before,
this can be a very daunting task.
Every state and every
dealer are going to have requirements specific to them based on state law and
the dealer’s tolerance for risk.
This article is meant to
give you a basic idea of what to look for in a policy.
Liability/Auto — This generally deals with test driving or
when your covered employees are driving your vehicles. This covers medical bills and damage to someone else’s car or property if you,
your customer, or your employees are involved in an accident that is their
fault while driving one of your vehicles.
Other Liability — This would cover medical bills if someone
fell or had an accident while they were on your lot. Think about someone
slipping on an icy sidewalk or an oil slick.
Personal Injury Protection — This would pay medical
expenses for you or occupants of your vehicles. This coverage is required in
Inventory – (Your vehicles) can include comprehensive
for things such as fire, hail, or vandalism as well as collision coverage, and
might have a maximum value per vehicle. Some dealers who own their vehicles
outright and have a very low ACV (actual cash value) do not carry this coverage
There are other coverages
you may consider. These are usually add-on benefits that require an increase in
Truth in Lending — Covers mistakes made on contract or
incorrect reporting of odometer.
Errors and Omissions – Have you ever made a mistake when
perfecting a lien? That’s what this coverage is for.
False Pretense – Covers you from consumers who purchase
using false information or bad checks.
This should give you a
good starting point to understand what to look for in a garage/liability
policy. Remember, no policy is right for every dealer or state, and rates may
vary wildly for very similar coverage.
Also, be sure you know
exactly what your policy says. Every provider is going to have different
requirements for what they will cover. For example, they may not cover a wreck
on a test drive if your salesperson is not in the vehicle. These are important
items for you to know.
If you need any further
help or guidance, please feel free to contact me at any time.
Cell 913-827-6677 |
Watch Dustin Kerr’s
latest video on Garage Insurance here.