What is Lube and Oil/New and Used Car Dealer Insurance?
Lube and Oil/New and Used Car Dealer Insurance is a specialized commercial insurance package designed to protect auto service businesses and car dealerships. Whether you operate a quick lube shop, sell used cars, or run a full-service dealership, this coverage helps safeguard your business from financial losses related to property damage, liability claims, and more.
Given the nature of your business, it’s crucial to ensure compliance with environmental and industry regulations, which can impact your operations and insurance needs.
Who Needs It
This type of insurance is essential for:
- Quick lube and oil change centers
- New car dealerships
- Used car dealers
- Auto repair and maintenance shops
- Detailing and car wash businesses associated with dealerships
Any business handling customer vehicles or selling cars should consider this coverage to manage risks and meet state or lender requirements.
What It Typically Covers
Coverage options vary by provider, but policies may include:
- General Liability: Covers third-party bodily injury or property damage that occurs on your premises.
- Garage Liability: Covers liability from operating a garage, including test drives and service work.
- Garagekeepers Insurance: Protects customer vehicles in your care, custody, or control.
- Dealer’s Open Lot: Covers your inventory of vehicles against theft, vandalism, weather damage, and accidents.
- Property Insurance: Covers damage to your buildings, tools, and office equipment.
- Workers' Compensation: Helps cover medical expenses for employees injured on the job (required in most states).
Common Exclusions and Limitations
Like most insurance policies, there are exclusions and coverage limits. These may include:
- Intentional damage or criminal acts
- Wear and tear or mechanical breakdowns
- Racing or illegal use of vehicles
- Unlicensed drivers or improper use of vehicles
Review your policy carefully to understand what is and isn’t covered.
Factors That Influence Cost
Premiums can vary based on several factors, such as:
- Business size and annual revenue
- Number and value of vehicles in inventory
- Location and security measures
- Claims history and coverage limits
- Number of employees and services offered
Your insurer may also consider your experience in the industry and any prior losses.
Proof of Insurance and Compliance
Most states and lenders require proof of insurance for licensing and financing. Certificates of insurance (COIs) verify active coverage and are often needed to operate legally or enter into contracts. Requirements vary by state, so check with your local regulatory agency.
How to Get a Quote
Getting coverage starts with a customized quote tailored to your specific business needs. Get a quote today to explore your options and protect your dealership or service shop.
Frequently Asked Questions
Do I need separate insurance for each location?
Yes, if you operate multiple locations, you typically need to list each on your policy or obtain separate coverage depending on your insurer’s requirements.
What’s the difference between Garage Liability and Garagekeepers Insurance?
Garage Liability covers third-party claims from business operations, while Garagekeepers Insurance protects customer vehicles in your care.
Is workers' compensation included in my dealer policy?
Workers' compensation is usually a separate policy but can sometimes be bundled. It's mandatory in most states if you have employees.
Are test drives covered by my policy?
Yes, most dealer policies include coverage for test drives, but conditions may apply, such as requiring a licensed driver and proper documentation.
Can I customize my coverage limits?
Yes, most insurers allow you to choose limits that reflect your business size, inventory value, and risk exposure.
Still have questions? Talk to a local insurance expert.