Dealer Plate Insurance: Ensuring Compliance and Coverage for Test Drives

Written By Charlotte Insurance on May 16, 2024. It has 0 comments.

vehicles on a dealer's lot, protected with dealer plate insurance

Automotive dealers have a lot to keep track of. They not only have to manage their employees, work with customers, stay in contact with lenders, and track their inventory, but they also need to ensure that they have the right insurance policies in place should something happen to any of the above. While some of these policies are standard knowledge, there’s one that some dealers might overlook thinking that it’s covered by their other insurance policies.

What is this crucial necessity? Dealer plate insurance. But what is it? And how does it work? Keep reading to learn everything that you need to know.

What is Dealer Plate Insurance?

When you go to a dealership, the first thing that you often notice is the dealership plates that are on many of the vehicles. These plates are specific to the dealer and often have the word “dealer” on them, making it clear that they aren’t standard license plates. If you go to test drive a vehicle, a dealer plate is fastened to the car. There are other uses for these license plates as well, including transporting vehicles to and from auctions, test driving a vehicle as a mechanic to make sure that it’s fit to sell, and so on.

How does dealer plate insurance fit into the picture? This type of insurance is designed specifically for dealership and kicks in when a vehicle is driven or moved using a dealer plate. It provides protection should something go wrong at these points in the process.

What Does Dealer Plate Insurance Cover?

Dealer plate insurance is a type of liability insurance. This way, if something happens while on a test drive or on the way to the auto auction, you’ll have some recourse as the dealership owner. Your insurance will pay for damages to the vehicle, injuries to the passengers and driver, and any third parties who may have been involved. Since it’s liability insurance, not comprehensive and collision or anything similar to standard car insurance, the policy may not cover everything, but it does provide enough protection to hopefully prevent a lawsuit if the car, and therefore the dealership, is found to be at fault.

How Much Coverage Do You Need?

When it comes to having a dealer plate insurance policy in place, you need to consider everything from potential damages and their costs to the requirements put upon your business by the state or local government. You might be required by law to have a certain amount of dealer plate insurance coverage. If this is the case, then you need to comply. However, if there are no government regulations here, you need to consider many of the factors involved should you need to call in a claim. Your insurer can help to ensure that you have the right amount of coverage.

Have Questions? Contact Charlotte Insurance

Want to learn more about dealer plate insurance for your auto dealership? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.

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