Apply for a North Carolina Surety Bond today! Single Source Insurance is a leading NC surety bond company. Apply easily online and take advantage of lowest rates. Quickly browse the bonds we offer for this state, or contact us for a full list.
In addition to obtaining an�auto dealer bond, North Carolina dealers are also required to purchase garage liability insurance in order to become licensed. Learn more about this policy below, and request a quote from Single Source Insurance today.
What Is Garage Liability Insurance for Auto Dealers?
Car dealers are required by the state of North Carolina to purchase comprehensive liability insurance covering their dealer plates as part of the process of becoming licensed to do business. While general liability insurance covers bodily injuries that non-employees suffer on the premises of an insured business, it falls short of covering all of the potential risks that are associated with the daily operations of a dealership or other auto-related business. For one thing, it does not cover damage to vehicles.
Commercial auto insurance covers damage to dealer-owned vehicles that occurs in the course of business operations, but it does not cover damage to or loss of customers� vehicles. Clearly, general liability insurance and commercial auto insurance alone don�t provide comprehensive coverage for businesses that involve having custody, care, and control over customers� vehicles.
Garage liability insurance, however, covers bodily injuries to non-employees or damage to property owned by another party, either on the dealer�s premises or during a test drive of a dealer-owned vehicle. And adding garage keeper�s coverage (typically as an endorsement to a garage liability policy), provides protection against damage to customers� vehicles while they are being worked on, moved, towed, test driven by an employee, or parked on the premises. That includes damage caused by employees as well as from severe weather or natural disasters, vandalism, or theft.
Who Needs It?
Used car dealerships are required to have garage liability insurance. But even businesses that may not have to purchase this policy as a condition of licensing can benefit greatly from having it. Any business that involves the custody, care, and control of customers� vehicles should certainly have garage keeper�s coverage. That includes dealerships and businesses such as:
Restaurants, hotels, and hospitals that provide valet parking
Independent valet parking services that are hired for parties and special events
Parking garages
How Does It Work?
Many auto dealers and auto-related businesses combine several important coverages into a comprehensive Business Owners policy, or BOP, that meets all of their liability insurance needs. For example, garage liability and garage keeper�s coverages may be combined with Worker�s Compensation and Defective Parts and Workmanship insurance. With this combination, any liability for damages�bodily injuries, property damage, and/or property loss�arising from business operations shifts from the policyholder to the insurance company.
How Much Does It Cost?
North Carolina is a mandatory insurance state, which means that any auto dealer that requests a quote from or submits an application to an insurance company must be offered insurance coverage. However, insurance companies have the option of placing a garage liability insurance policy with North Carolina�s reinsurance facility, which charges the highest possible premium rates and places limits on the amount of liability insurance a dealer can purchase.
Referring coverage to the state reinsurance facility is particularly common with new dealerships that have little or no business track record and with dealers that offer their own financing because of the risks associated with the potential for repossession activities.
Certain choices made by the policyholder will have an impact on the cost of garage liability insurance, such as the policy limit (the maximum amount that will be paid on a claim), the size of the deductible chosen, and the specific coverages included.
Request A Quote
You can rely on Single Source Insurance to get you the best deal possible on the insurance you need for your dealership or repair facility. Request a quote today!
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Frequently Asked Questions
How much does dealer plate insurance typically cost?
The typical cost of dealer plate insurance varies, but it is generally between $500 to $1,500 per year, depending on factors such as the number of vehicles covered and the level of coverage required.
Is dealership insurance required by law?
Dealership insurance is required by law in most states to protect both the dealership and its customers. The specific insurance requirements vary by location, but typically include liability, property, and other coverage to ensure legal compliance.
What are the benefits of having dealership insurance?
The benefits of having dealership insurance include protection against liability claims, coverage for property damage, and protection for employees. It helps dealerships manage risks and ensure the financial security of their operations.
How to file a claim with garage dealers insurance?
To file a claim with garage dealers insurance, you need to contact the insurance provider, provide details of the incident, and submit any required documentation to initiate the claims process.
What is dealer plate insurance and how does it work?
Dealer plate insurance covers vehicles that are owned by a car dealership and used for test drives, transporting vehicles, or other business purposes. It provides liability coverage for the dealer when the vehicle is being driven.
What is covered under garage dealers insurance policy?
A garage dealers insurance policy typically covers property damage, liability, and other risks associated with operating a garage or dealership, such as customer vehicles, inventory, and business operations.
What are the benefits of garage dealers insurance?
The benefits of garage dealers insurance are protection against liability for damage or injury caused by vehicles in the dealer's possession, as well as coverage for theft, fire, and other risks associated with operating a garage or dealership.
How much does garage dealers insurance cost?
The cost of garage dealers insurance varies depending on factors such as the size of the garage, the types of vehicles sold, and the level of coverage required. On average, garage dealers insurance can range from $500 to $2,500 per year.
What types of insurance do car dealerships typically need?
Car dealerships typically need liability insurance, property insurance, worker's compensation insurance, and dealer's open lot insurance to protect against various risks associated with their business operations.
What is the difference between dealer plate insurance and regular insurance?
The key difference between dealer plate insurance and regular insurance is that dealer plate insurance covers vehicles used for business purposes, while regular insurance covers personal vehicles.
What is garage dealers insurance and how does it work?
Garage dealers insurance provides coverage for businesses that sell, service, or repair automobiles. It typically includes liability, property, and employee-related coverage to protect the dealership's operations and assets.
What are the benefits of having dealer plate insurance?
Having dealer plate insurance provides coverage for vehicles used for business purposes, such as test drives or transportation to and from service locations, helping to protect the dealer and their customers.
How much does dealership insurance usually cost?
The typical cost of dealership insurance varies based on factors such as the size of the dealership, the types of vehicles sold, and the level of coverage required. On average, dealership insurance can range from $5,000 to $30,000 annually.
What is the coverage limit for dealer plate insurance?
The coverage limit for dealer plate insurance typically ranges from $300,000 to $1,000,000 in liability coverage, depending on the policy and state regulations.
Is garage dealers insurance mandatory for car dealerships?
Garage dealers insurance is generally mandatory for car dealerships to protect against liability and property damage claims related to their business operations.
Who is eligible for dealer plate insurance coverage?
Dealers and their designated employees are eligible for dealer plate insurance coverage, which provides protection for vehicles used for business purposes.
Who needs garage dealers insurance coverage?
Garage dealers who sell or service vehicles need garage dealers insurance coverage to protect their business against risks such as property damage, liability claims, and other potential losses.
What vehicles are covered under dealer plate insurance?
Dealer plate insurance typically covers vehicles owned by a dealership, including cars, trucks, and motorcycles, that are used for test drives, demonstrations, or transportation between dealerships.
How do I obtain dealer plate insurance for my business?
To obtain dealer plate insurance for your business, you need to contact your insurance provider and provide information about your dealership and the vehicles you operate. The insurance provider will then determine the appropriate coverage and premium for your business.
What factors affect dealer plate insurance pricing?
Factors that affect dealer plate insurance pricing include the number and types of vehicles covered, the driving record of the dealership owners, the location of the dealership, and the amount of coverage required.
Are there limits to dealer plate insurance coverage?
Dealer plate insurance coverage has certain limits, as the extent of coverage varies based on the specific policy terms and conditions. The coverage may be subject to limitations on the types of vehicles, usage, and liability.
What documentation is needed for garage dealers insurance?
The documentation needed for garage dealers insurance typically includes business licenses, vehicle registration documents, financial statements, and proof of previous insurance coverage.
Can dealership insurance cover natural disasters?
Dealership insurance can cover natural disasters, such as hurricanes, tornadoes, and floods, which can cause significant damage to a dealership's property and inventory. Appropriate coverage can help protect the dealership from financial losses in such events.
How can I reduce dealership insurance premiums?
Reducing dealership insurance premiums can be achieved by maintaining a good safety record, implementing security measures, and exploring coverage options that align with your specific business needs.
What exclusions exist in garage dealers insurance?
Garage dealers insurance may exclude coverage for loss or damage to vehicles undergoing repair, theft of tools and equipment, or liability for injuries to customers on the premises.
How often should I review dealership insurance policies?
Dealership insurance policies should be reviewed annually to ensure adequate coverage and to identify any necessary changes or updates to the policy.
Is there a grace period for dealer plate insurance?
The grace period for dealer plate insurance can vary depending on the state and the specific regulations. Generally, there is a limited grace period, typically between 10-30 days, during which the dealer plates can be used without having the insurance policy in place.
What risks does garage dealers insurance protect against?
Garage dealers insurance protects against the risks of customer injuries, property damage, and liability claims that can arise from operating a garage or car dealership business.
Can I transfer dealer plate insurance to another vehicle?
You can transfer dealer plate insurance to another vehicle if the dealer plate is registered to the same person and the new vehicle meets the criteria for a dealer plate.
What should I do after an accident involving dealer plates?
After an accident involving dealer plates, promptly notify the dealer and your insurance provider, document the incident, and cooperate with any investigations to ensure the proper handling of the situation.
