Every auto dealership is unique, each facing a set of business risks that need to be mitigated. Classic car dealerships are even more unique than most used car dealerships. With highly valuable inventory on hand, classic car dealerships need business insurance protection for the physical risks associated with their businesses as well as for the potential liabilities they face each day.
The precise type of coverage you need is determined by the types of vehicles you sell, the number of vehicles you keep in inventory, and a variety of other factors. Certain insurance companies specialize in writing coverage for classic car dealerships.
You need an experienced, knowledgeable independent insurance agent who regularly works with classic car dealerships to ensure that you get the comprehensive coverage you need at a reasonable price.
Why Do You Need Classic Car Dealership Insurance?
Your classic car dealership insurance program must be highly customized for your location with a variety of protections in the form of liability and property coverage.
Here are just some of the property and liability risks that classic car dealerships face:
- Customer slips and falls at your business
- Worker illness or injury
- Fire, bad weather, vandalism, or theft damages to vehicle inventory, buildings, or their contents
- Damage to a customer’s vehicle while in your care (e.g., classic cars being sold on consignment)
- Employee theft or crime
- Business interruption
- Customer causes bodily injury or property damage during a test-drive
- Damage to vehicles during transport
Classic and antique automobile dealerships face different circumstances than most other car dealers. Because classic and collector cars have high values that change over time, one of the most important reasons for insurance is to protect your classic car inventory. Your insurance agent should understand the market and the value of your inventory now and as it changes over time.
What Does Classic Car Dealership Insurance Cover?
Classic car dealership insurance protects you and your business from inventory losses and from all of the other risks that any car dealership faces. Your liability and property damage risks can be covered with policies that are specifically tailored to your unique situation.
It should be noted that underwriters for classic car dealership insurance will require you to meet certain conditions in order for you to qualify for coverage. Your insurance company may, for example, require you to keep your classic car inventory under cover in order to protect it from the elements. And if you function as a restoration shop, you’ll need to purchase separate coverage for that part of your business.
Some of the special coverages you’ll need include:
- Commercial property coverage: Protects your business if a fire, vandalism, smoke, theft, or another event damages your property. It provides coverage for lost inventory, office equipment, computers, and more. Most commercial property policies also include business interruption coverage. This will pay for rent, employee salaries, and other expenses if your dealership must close temporarily due to an unforeseen disruption.
- Dealer’s open lot coverage: Provides physical damage coverage to your covered vehicles and equipment, including vehicles in inventory. It includes collision, comprehensive, and specified causes of loss coverage for owned vehicles. Physical damage coverage includes damage caused by events such as fire, lightning, explosion, theft, windstorm, hail, flood, vandalism, and malicious mischief. Your inventory may be covered on an agreed value basis. This means that the underwriter and you agree to the values of the cars, and those values become the coverage limits for each vehicle. If there is a total loss of a vehicle, the agreed value of the vehicle is paid.
- Commercial general liability (CGL) insurance: Provides broad protection for most basic liability issues that your dealership could face. It protects you from the costs of lawsuits related to accidents, property damage, and a variety of other mishaps that could occur on your lot. It also provides you with financial protection if there are mistakes in your advertising or if liability issues arise from the products you sell. You will likely want to consider garage liability insurance, which provides several forms of liability insurance more specifically designed for the needs of auto dealers and other garages.
Other Insurance Policies for Classic Car Dealers
Classic car dealerships may also need the following types of coverage, and others, depending on your needs and the specifics of your business. Many of these policies can be purchased as endorsements to your basic property or liability policies, or they can be packaged into a comprehensive policy designed specifically for classic car dealerships.
- Electronic data protection (EDP): Protects you from the financial burden associated with losing digital files like inventory, sales data, employee contracts, customer financing information, and more.
- Employee theft and crime coverage: Protects your business from the costs of theft, dishonesty, or fraudulent acts committed by a single employee or a group of employees.
- Title errors and omissions coverage: Provides protection for used car dealers who make an error in title-related paperwork.
- Truth in lending coverage: Protects car dealers who fail to comply with the Truth in Lending provisions of the Consumer Credit Protection Act.
- Worker's compensation insurance: Protects employees who are injured on the job.
- Product liability coverage: Coverage for losses or injuries to a user, buyer, or bystander caused by a defect or malfunction of a vehicle that you sold.
- False pretenses coverage: Protects your business if you are unwittingly coerced to release a vehicle to someone under false pretenses.
- Errors and omissions coverage: Covers odometer, truth in lending, and title prep claims.
- Garagekeepers liability insurance: Protects you if a customer’s vehicle is damaged while in your care, custody, or control.
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What Does Classic Car Dealership Insurance Cost?
Classic car dealerships need a customized mix of property and liability insurance to ensure that there are no gaps in coverage. The cost to cover your classic car dealership with a comprehensive business insurance program will vary depending on:
- The size of your business
- Your location
- The number of employees you have
- The products and services you provide
- The value of your commercial property, including your building (if you own it) and all of its contents
- The value of your vehicle inventory
- The types of coverage and the coverage limits that you require
- The crime and weather risk in your city
Find and Compare Quotes
An independent insurance agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right classic car dealership insurance. They’ll walk you through the handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t take into account the whole picture. They can omit important coverage that will leave you devastated if something unexpected happens. And they can leave out cost savings opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent insurance agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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