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Dealership Insurance

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Dealership insurance

Dealership Insurance

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Dealership Insurance (often called Garage Insurance) is a specialized commercial package designed for franchised and independent auto dealers. It combines “Garage Liability” to cover day-to-day operations with “Dealers Open Lot” (DOL) coverage, which protects your vehicle inventory from weather, theft, and vandalism. This coverage is the financial firewall between your profit margins and the risks of managing a high-value fleet.

The “Risk Reality”: Inventory & Liability

Dealers face a unique dual threat: liability from test drives and physical damage to the lot. A single hailstorm can write off an entire quarter’s profit in minutes. According to the National Automobile Dealers Association (NADA), dealership inventory costs and operational risks have risen sharply, making the protection of assets against weather events and theft critical for solvency. Furthermore, “False Pretense” schemes—where a scammer uses a fake ID to steal a car during a test drive—are on the rise and are often excluded from standard policies.

Dealership Insurance Coverage

We structure policies that protect both your business operations and your rolling inventory.

What is Covered
Garage Liability: A hybrid of Auto and General Liability. It covers bodily injury and property damage caused by your operations, including test drives.
Dealers Open Lot (DOL): Pays for physical damage to your inventory caused by collision, theft, fire, wind, or hail.
Garagekeepers Liability: Protects customer vehicles left in your care for service or repair (e.g., in your body shop).
False Pretense: Covers losses if you are tricked into parting with a vehicle (e.g., fraudulent test drive) or if you accidentally buy a vehicle without a clear title.
What is NOT Covered (Exclusions)
Employee Tools: Mechanics’ personal tools are typically excluded unless specifically added via an endorsement.
Faulty Workmanship: Insurance covers the damage caused by a bad repair (e.g., a wheel falling off), but not the cost to redo the repair itself.

The “Dream” Difference: Standard vs. Comprehensive

Most direct quotes only cover the basics in the left column. We shop multiple carriers to secure the critical add-ons in the right column that actually protect your livelihood.

Risk Area Standard Garage Liability Comprehensive Dealer Package
Accident During Test Drive ✔ Covered ✔ Covered
Hail Damage to Inventory ✖ Excluded ✔ Covered (Open Lot)
Theft by Deception (False ID) ✖ Excluded ✔ Covered (False Pretense)
Title Errors & Omissions ✖ Excluded ✔ Covered

 

 

Dealership Insurance Cost

“How much does dealer insurance cost?” Premiums are calculated based on your total inventory value and the number of dealer plates/employees.

  • Premium Estimates: According to recent industry market data, a small used car lot might pay $3,000 to $6,000 annually, while large franchise dealerships with high inventory values can pay upwards of $20,000+.
  • Open Lot Deductibles: High deductibles for weather events (e.g., $2,500 per car for hail) can significantly lower your monthly premium.
  • Loss History: A history of theft or multiple accidents on test drives will increase rates, as dealers are viewed as high-frequency risk targets.

The “Independent Difference”: Why Dream Assurance?

Direct writers often struggle with the complexity of inventory fluctuation. “Independent Means Multiple Choices.”

  • Inventory Flexibility: We work with carriers that allow monthly reporting forms, so you only pay for the inventory you actually have on the lot that month.
  • Bonding Services: We can bundle your required DMV Dealer Bond (Surety Bond) with your liability policy for easier renewal.
  • Risk Advocacy: From hail claims to lot theft, our team manages the claims process to minimize business interruption.

 

Coverage Guidance That Meets You Where You Are

Headquartered in Overland Park, KS and serving clients across multiple states, our team provides straightforward guidance to help you make informed insurance decisions.

If you're comparing insurance options or reassessing your current coverage, we'll help you evaluate what you have, identify potential gaps, and find a path forward that makes sense for your situation.

Licensed In 30+ States

Headquartered in Overland Park, KS, with licensed support across the Midwest, South, Northeast, and West.

  • AL, AZ, AR, CA, CO, DE, FL, GA, IL, IN, IA, KS, KY, MI, MN, MS, MO, MT, NE, NV
  • NJ, NM, NC, ND, OH, OK, OR, PA, SC, TN, TX, UT, VT, VA, WA, WI, MD, MA, & SD