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Jennifer  Livingston

Jennifer Livingston Consultant

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Things to Look for When Insuring Your Car Dealership

There is no such thing as car dealership insurance, but it should be one of the most important considerations for dealership owners. If you’re thinking of starting or your own car dealership, you must have several insurance policies, including property and casualty coverage on all your cars. Most importantly you should have fleet insurance, as it’s impossible for car dealers to insure each of their cars individually. However, the coverage isn’t car insurance, but it does cover your vehicles in case of an accident.

To protect your car's against theft, loss, vandalism and other damage you’ll also need car lot insurance. Keep in mind that no dealership can legally sell vehicles without lot insurance. However, the considerations for insuring your car dealership don’t stop there; you must also ask important questions, know the specifics of the types of insurance you need and learn ways to save on your insurance premiums.


Ask Important Questions

Asking questions is an essential part of purchasing any type of insurance. These questions will ensure you obtain the right kind and amount of coverage. Purchasing insurance for your dealership is much like purchasing insurance for your car, and requires the same types of questions. For example, some good question to ask are: What discounts are available? Do you specialize in insurance for dealerships? How much insurance does my dealership need? Can the policy be changed easily? What are the premium options?

These are all important questions that should be asked, but you may also bring other specific and personal questions to the table. This will ensure that all your bases are covered even before you obtain a quote. Each insurer’s answers to these questions should be used to help you learn more about the coverage you need, compare services and narrow down your options; much like with traditional auto insurance.


Learn the Specifics of Dealership Insurance

If you’re going to run a car dealership, knowing the specifics of the type of insurance you can obtain and need is of utmost importance. First you should know that individual vehicles in a fleet can’t be registered to a car dealer, so the dealership must purchase liability insurance. Secondly, and most importantly, all car dealerships should have property and casualty insurance. These two insurance types combined will provide the proper protection your cars need. Liability limits are set in this type of coverage, which ensures you’ll be paid if there’s an accident during a test drive and more. The coverage also insures your vehicles in case of a fire, weather damage, theft and pretty much anything else that could happen to them.

You’ll also need commercial car insurance coverage that’s unique to car dealers – dealership insurance. Dealership insurance is designed for the automotive industry, and covers areas that property and casualty coverage can’t. For example, it covers: any loaner vehicles you loan to customers, cars you’ve obtained, but haven’t completely purchased yet, customer cars you’re performing maintenance on, damage to a customer’s vehicle while being driven by an employee and accidents before or during a test drive (caused by customers or employees).


Learn Ways to Save on Your Insurance Premiums

Dealerships don’t qualify for traditional car insurance discounts, but there are some discounts specifically designed for them. First, you can save money on your insurance premium if you provide employee training. Many insurers even provide a list of training courses they offer discounts for or offer discounts for creating a new training program.

Next, insurers offer reduced rates to dealerships that routinely check a customer’s driving history before making a sale. They also provide discounts to dealerships that have security on their lot, such as overnight security officers, security systems and cameras. Unbelievably, insurance companies also offer discounts to dealerships whose cars are only test driven on a pre-determined route. Apparently, driving the same route every test drive reduces the risk of an accident.

Finally, if you conduct employee background checks, you also qualify for discounts on your insurance premium. For the insurance company, this ensures a dealership isn’t hiring criminals or individuals with questionable backgrounds.

Investing in a car dealership is a major venture that requires major considerations, including insurance coverage. If you don’t know how to protect yourself, your vehicles and your employees, you could be out of business before you’ve even started. Most importantly, you can’t legally sell cars from a car lot without some type of insurance. So, keep this in mind, and don’t skimp on learning all that you can about car insurance and insurance coverage for your dealership.

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