An auto dealership is really several businesses at once — sales, often service, test drives, and a lot full of valuable inventory — so its insurance uses specialized coverages you won't find on a standard business policy.
The core coverages
- Garage liability — the dealer equivalent of general liability, covering premises, operations, and the auto-specific exposures of selling and moving vehicles.
- Garagekeepers — damage to *customers'* vehicles in your care (in for service, detailing, or storage).
- Dealers open lot — physical-damage coverage on your for-sale inventory against hail, theft, fire, and collision.
- Commercial auto — for dealer-owned and loaner vehicles and test drives.
Add workers' comp for your team and, if you have a service department, coverage for tools and equipment.
The exposures dealers underestimate
- Test drives and loaners — vehicles off-lot with customers behind the wheel.
- Weather to inventory — a single hailstorm across a full lot can be a catastrophic open-lot claim.
- Faulty repair / completed operations — if you service vehicles, work you've done can lead to claims later.
- Finance & insurance office — errors in F&I can create professional-liability-style exposure.
What drives your cost
Inventory values and how they're reported, lot security, your location's weather and theft profile, and — if you have a service shop — your repair operations all factor in. Accurate inventory reporting is important; under-reporting can leave you short at claim time.
Getting covered
You can complete our Auto Dealer application online or request a quote, and we'll assemble garage liability, garagekeepers, and open-lot coverage sized to your inventory and operations. Related reading: commercial auto insurance.
Frequently Asked
What is a garage policy?
A specialized package for auto businesses that combines garage liability (premises and operations, including customer autos in your care) with coverage tailored to dealers and service operations.
What is dealers open lot coverage?
Physical-damage coverage for the inventory of vehicles you have for sale — protecting against theft, hail, fire, and collision on the lot.
What's garagekeepers coverage?
It covers damage to a customer's vehicle while it's in your care, custody, or control — for example, in for service or storage.
This article is general information for business owners, not insurance or legal advice, and does not bind or alter coverage. Policy terms, eligibility, and pricing vary by carrier and state — confirm specifics with our licensed team before making decisions.