Is your car dealership fully protected from unexpected losses or lawsuits? Many dealers think they have the right insurance coverage until a costly problem proves otherwise. Having the wrong policy or missing key details can leave your business at serious risk.
Understanding common insurance mistakes can save you money, stress, and damage to your reputation. Let’s take a look at four major insurance mistakes car dealers make and how to avoid them so your dealership stays safe and secure.
Not Reviewing Coverage Regularly
Many dealers forget to review their insurance as their business grows. If you add more vehicles, staff, or services, your current plan may not cover everything. This gap can lead to denied claims when you need help the most.
Make it a habit to review your policy once a year. Update it when changes happen in your business. A quick check can protect you from major financial losses.
Underinsuring Inventory
Your inventory is your biggest asset, but many dealers don’t insure it for its full value. If a fire, flood, or theft hits, the payout may not cover your total loss. This can force your dealership to close or take on heavy debt.
To avoid this, always keep your coverage amount updated. Include the full value of every vehicle on your lot. It’s also wise to review your plan after large vehicle shipments.
Skipping Garage Liability Insurance
General business insurance may not cover all dealership risks. Skipping garage liability insurance is a common mistake. This coverage protects you when a customer’s vehicle is damaged on your lot or while being serviced.
Without it, you could be stuck paying out of pocket for accidents. To avoid this, make sure your policy includes garage liability. For more helpful tips and other insurance options available for you, visit Auto Dealership Insurance website and explore options tailored to car dealers.
Not Training Staff on Insurance Procedures
Even with good insurance, poor communication can ruin a claim. If your team doesn’t know how to report an accident or damage properly, your claim may be denied or delayed.
Train your staff on what to do in case of an incident. Keep reporting forms and contact info easy to find. A clear plan helps protect your dealership and keeps your insurance record clean.
Ignoring Cyber Liability Risks
Car dealers handle sensitive customer data, from driver’s licenses to loan information. Ignoring cyber threats is a growing mistake. A single hack can cause data loss, fines, or lawsuits.
Make sure your insurance covers cyber liability. Also, use strong passwords and secure software. Cyber insurance helps your dealership recover faster after a digital attack.
Avoid These Common Insurance Mistakes Car Dealers Can’t Afford to Make
Avoiding these common insurance mistakes can keep your dealership safe, your costs down, and your business running smoothly. Insurance isn’t just a requirement; it’s a key part of protecting everything you’ve worked hard to build.
By staying alert, reviewing your policies, and educating your team, you reduce risk and increase peace of mind. Don’t wait until a problem arises to realize what’s missing in your coverage. Protect your dealership by taking smart steps today.
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