Dealership & Garage Insurance: What You Need to Know Before a Claim Happens
Running a dealership or auto garage involves constant exposure to risk.
Vehicles on your lot.
Customer cars in your care.
Employees moving and operating inventory.
One incident can lead to a significant financial loss if your coverage is not structured properly.
The challenge is that many policies appear adequate until a claim occurs.
What Is Dealership & Garage Insurance?
Dealership and garage insurance is designed for businesses that:
- Sell vehicles
- Repair or service vehicles
- Store customer or inventory vehicles
It combines multiple coverages into a single policy tailored to your operations.
Key Coverages You Should Understand
Garage Liability
Covers bodily injury or property damage arising from your operations.
Example: A customer is injured on your premises or during a test drive.
Garagekeepers Coverage
Protects customer vehicles while they are in your care, custody, or control.
Example: A customer’s vehicle is damaged while parked at your shop or during service.
Dealer Open Lot
Covers your inventory vehicles against:
- Theft
- Vandalism
- Weather-related damage
This is critical if multiple vehicles are impacted in a single event.
Test Drive Coverage
Protects your business when vehicles are being operated by customers or employees.
Example: An accident occurs during a test drive.
Property and Business Income
Covers your building, equipment, and loss of income if operations are interrupted.
Example: A fire or storm damages your location and halts business operations.
Umbrella Coverage
Provides additional liability protection above your primary policy limits.
Important for larger claims and lawsuits that exceed base coverage.
Common Coverage Gaps
Many dealership and garage policies have gaps such as:
- No proper Garagekeepers coverage
- Inadequate liability limits
- Incorrect inventory valuation
- Missing test drive exposure coverage
- No umbrella protection
These gaps typically surface only after a claim.
What Impacts Your Insurance Cost
Premiums are based on several key factors:
- Number of vehicles on the lot
- Type and value of inventory
- Security measures such as cameras, lighting, and fencing
- Employee driver records
- Prior loss history
Strong risk management practices can lead to more favorable pricing.
Why This Matters
An uncovered claim can:
- Create significant financial strain
- Lead to legal exposure
- Disrupt business operations
Insurance should be viewed as a critical business safeguard, not just a requirement.
Final Thought
If you operate a dealership or garage, it is important not to assume your current policy provides full protection.
A structured review can help identify coverage gaps, improve protection, and potentially reduce costs.
Need a Review?
Hawk’s Bay Insurance Group works with dealerships and garage operations across multiple states.
We can assist with:
- Policy review
- Gap analysis
- Competitive market options
972-332-0549
www.hbinsurancegroup.com