Many used auto dealership owners in Massachusetts and Connecticut are unaware that the collision coverage they currently have under their standard Garage Liability or Lot Insurance policy may not be enough to protect them, or one of their employees, in the event that they crash a dealer-owned vehicle.
Specifically, if you or someone who works for you were to get in an accident while driving or transporting a vehicle that has traveled a distance greater than 50-miles away from your car lot, then your current collision coverage will not apply.
For this reason, HUB International, Insurance Center of New England, wants to make all franchised and non-franchised auto dealers, large and small, aware of a critical coverage which should be added to their commercial insurance program – Dealer Driveaway Collision.
It’s important to understand what is typically included in a standard used car dealership insurance policy and how this policy protects you from most accident-related claims. Nearly all dealers will find that their insurance provides Auto Liability (including Dealer Plate Coverage) and Dealers Open Lot Coverage, which together form an excellent foundation for guarding your business against unfortunate claims.
Auto Liability Coverage provides protection in case of a lawsuit stemming from an accident that occurs when you, or someone you employ, are driving a vehicle. Whether you own the vehicle or not, this coverage should apply to travel over short distances, for example to and from a storage lot, repair facility or between car lots. Dealers Open Lot provides physical damage coverage for vehicles that are owned by your business. It typically includes both collision and comprehensive coverage and extends to you or an employee involved in a crash within 50 miles of the dealership.
In most instances, these coverages will safeguard you and your business from costly claims due to a lawsuit and pay for any accident-related repairs you need to make to the damaged vehicle, up to the limits of your policy. However, there is a significant exclusion that could prevent you from collecting on a collision claim – if the car involved was being driven or transported a distance greater than 50 miles, coverage does not apply.
At HUB International, we believe a real-life example is the best way to illustrate the repercussions of having such a gap in insurance protection. So, here’s a situation that could happen to any used car dealer:
You log on to the ADESA Boston auto auction site looking for a very particular car that a long-time client of yours has their heart set on. Once you’ve tracked it down, you put in your bid and are pleased when you end up getting this vehicle for your client. Now, you just have to pick it up from the auction house which is located over 90 miles away from where your dealership is located. So, you and one of your employees set off in a vehicle your dealership owns to pick up the dream machine. The drive out to the auction house is seamless, and so, for the ride back to Western Massachusetts, you’ve put your trusted employee at the wheel of your client’s soon-to-be most prized possession. Everything is going smoothly, but as you head up route 90 just outside of Framingham, MA your employee gets mixed up in a nasty three-car pileup. Luckily, nobody is too badly hurt – just some minor bumps and bruises. But your client’s dream car? Well, that’s a whole different story. It is completely totaled. Even worse, though, as you hear the details of the accident recited to the police, you realize that your employee is the one at fault.
In this situation, if you have a basic used car lot insurance policy, with the standard 50-mile exclusion, you are most likely not covered for any of your loss. This probably means that you would now be on the hook to locate another car for your client – if you can even find that same one again. Plus, you could be out thousands of dollars for the cost of the auto involved in the crash. Even worse, an event such as this could cripple your dealership financially.
The thought of taking such a costly financial hit is unsettling, but it doesn’t have to be if you have Dealers Driveaway Collision. This coverage adds an extra level of protection that may help protect your used car business in these types of situations. This endorsement broadens the collision coverage for vehicles being driven or transported from the point of purchase or distribution to a destination and covers accident-related damages that might occur during the pickup or delivery of vehicles to or from a point more than 50 miles from the dealership.
Because no two used car lots are the same, identifying the optimal insurance coverage solutions for your business should always begin with a thorough risk assessment from a reliable business insurance professional.
At HUB International, our risk management and insurance specialists are available to meet with you to identify your distinct exposures and to understand your special coverage requirements. When you partner with our team, you can be confident that we will take the time to do a careful investigation of all the risks your dealership may face, from the most obvious ones to the most obscure. Then, we will customize an insurance program for your business, with the critical coverage options you need, from one of our many reputable insurance carriers, all at a price that you can afford.
Once we complete our detailed evaluation of your dealership, we will work with you to ensure that you have all the essential business insurance coverages in place, including comprehensive workers’ compensation coverage, in the event you or an employee are involved in any kind of accident. We also want to do everything we can as your insurance professional to help you get your claims resolved as soon as possible, which includes assigning our in-house claims specialist to assist you in the claims process.
If you contact HUB International today, we will gladly start working on finding you the best insurance options to protect your used car dealership and everything you’ve worked so hard to build.