Why Insurance is Important When You Own an Auto Dealership
If you are an auto dealer, you probably know that it is not easy to run the shop. Whether you detail cars in an open yard or you sell used auto parts in a showroom, meeting market demand while protecting your business can be challenging. With all the risks involved, you should prioritize how you protect your investment. Insurance is certainly something to consider.
Auto dealer insurance can safeguard the financial interests of your business. Insurance for auto dealers protects your high-value replacement parts, customers, and employees. Depending on the size of your business, you can choose from different plans that meet your auto dealership. Most auto dealers may think that insurance is just an added cost with no benefits. However, the long-term benefits outweigh any costs. Read on to discover why insurance is essential when you own an auto dealership.
Buyer’s Remorse. You have probably heard or seen a case where a buyer sued the dealer because they did not like a part in their car. Some customers may claim that the dealer deceived them into buying a vehicle. Some customers may also claim that the dealer took advantage of their disorder to coerce them into purchasing a brand-new car. Most of these cases are not legitimate causes for action. Such customers are people who are only looking to unwind the deal. Often, such cases are not covered by the garage or auto dealer policy. The policy will not respond to such claims since there was no property damage or bodily harm. In such cases, the dealer gets sued, and they have to spend a lot of money to hire attorneys to defend their arguments. Unless the dealer has an insurance policy that covers such claims, he or she is on their own.
Damage. When your vehicle is damaged in an accident, your insurance company can pay you a new one. If only the bumper were damaged, you could have it replaced with a second hand one. However, some people insist that you should replace it with a brand-new one. If your vehicle were five years old, it would make more sense to have it replaced. Such instances can lead to disputes, which you can avoid if you have an insurance policy that provides Actual Cash Value damage.
False Pretense. Sometimes thieves use brainy approaches to steal a vehicle. A thief may pose as a potential buyer and drive away with the car. Some may take the key, duplicate keys, or even distract the salesperson. Some garage policies may cover such instances. A dealer may also wrongfully accuse someone of stealing a vehicle. Auto dealership insurance covers all these claims.
Test Driving. A customer may crash a vehicle while he or she is text driving. The garage policy does not cover such a customer. However, this may go back to the interpretation of the policy language, state laws, and definition of a customer. According to the policy language, a customer may be someone who brings his/her car into the dealership for repairs or a potential buyer. If the dealership is not insured, a dispute may arise on who should meet the repair costs.