Car Dealership Insurance

Car Dealership Insurance

Protecting inventory, customers, and dealership operations

Car dealerships face unique risks involving vehicle inventory, customer test drives, employee activity, and daily interaction with the public. Whether operating a new car dealership, used car lot, or multi-location auto sales business, exposures can arise from accidents, property damage, theft, or liability claims. Even a single incident involving a vehicle, customer, or employee can lead to costly losses.

Properly structured insurance helps protect your inventory, your property, and the long-term stability of your dealership.

Key Risks in Car Dealership Operations

Dealerships face exposure related to:

• Damage to vehicle inventory

• Customer accidents during test drives

• Garage liability claims

• Employee injuries

• Theft or vandalism

• Property damage to the lot or building

• Contract and lender requirements

Losses can occur even in well-managed dealerships.

Core Coverages for Car Dealerships

Dealership insurance programs typically include:

Garage Liability
Protects against bodily injury and property damage claims related to dealership operations.

Garagekeepers Coverage
Protects customer vehicles while in your care, custody, or control.

Dealer Open Lot / Inventory Coverage
Covers vehicles held for sale against damage, theft, or certain physical loss.

Commercial Property
Covers buildings, offices, and equipment against covered loss.

Workers Compensation
Provides coverage for employee injuries as required by law.

Commercial Auto
Covers dealership-owned vehicles used for business purposes.

Umbrella / Excess Liability
Provides additional limits for severe or multi-claim situations.

What’s Commonly Overlooked

Dealership insurance programs are often weakened by:

• Underinsured vehicle inventory

• Missing test drive coverage

• Inadequate liability limits

• No coverage for weather damage

• Gaps between garage and auto coverage

• Failure to update inventory values

These issues often appear only after a claim occurs.

Real-World Claim Examples

• A customer crashes during a test drive

• Hail damages multiple vehicles on the lot

• A fire damages the showroom

• A customer is injured on the property

• A vehicle is stolen overnight

Even one loss can result in significant financial impact.

Why Proper Placement Matters

Dealership coverage varies based on:

• Number of vehicles in inventory

• Type of vehicles sold

• Test drive exposure

• Lot size and location

• Lender requirements

• State regulations

Improper placement can lead to uncovered losses or contract issues.

Our Approach

At Cory Washington & Co., we structure dealership insurance programs based on your inventory value, lot exposure, and daily operations. We coordinate garage liability, inventory, property, and excess coverage to ensure your business is protected from the real risks of selling and servicing vehicles.

When your business depends on inventory, protection must keep up with it.