Coverage for the lot, the inventory and the test drive.
Insurance for used car dealers, heavy truck dealers, wholesalers, and auto salvage and dismantling yards.
Quick answer An auto dealer needs garage liability for operations and dealer plates, dealer's open lot coverage for inventory, garagekeepers for customers' cars and, in California, a DMV dealer surety bond.
- Dealer's open lot coverage is physical damage coverage for the vehicles in a dealer's inventory, for losses such as theft, hail and vandalism.
- Garage liability generally covers a dealer's operations, including vehicles driven on dealer plates, subject to the policy terms.
- California dealers need a DMV dealer license and a surety bond, and floor-plan lenders set their own insurance requirements.
- Underwriters rate auto dealer insurance on inventory values, lot security, dealer plates, drivers, location and claims history.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed October 2026 · How this page is researched
Dealers need garage coverage
A dealership's risk lives on the lot and on the road: customers test-driving cars, employees moving inventory, and cars damaged by hail, theft or vandalism. Garage liability covers the operations and dealer plates, and dealer's open lot covers the inventory itself.
California dealers need a DMV dealer license and a surety bond, and floor-plan lenders set their own insurance requirements. I place dealer coverage through a specialty program for dealers, salvage yards and garages.
- Garage liabilityOperations, test drives and vehicles on dealer plates.
- Dealer's open lotPhysical damage to inventory on the lot.
- GaragekeepersCustomers' vehicles in your care.
- DMV dealer bondThe surety bond required for your license.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- License: DMV dealer license type and years in business.
- Inventory: average and peak inventory values.
- Lot: location, fencing, lighting and security.
- Plates and drivers: dealer plates and who drives them.
- Floor plan: lender insurance requirements.
- History: current policies and claims.
Auto dealer insurance, answered
What is dealer's open lot coverage?
Physical damage coverage for the vehicles in your inventory, for losses such as theft, hail and vandalism.
Does garage liability cover test drives?
Garage liability generally covers your operations, including vehicles driven on dealer plates, subject to the policy terms.
Do California dealers need a bond?
Yes. The DMV requires a surety bond to issue a dealer license.
What do underwriters rate on?
Inventory values, lot security, plates, drivers, location and claims history.
Do you offer auto dealer insurance outside California?
Yes. Clients across the country send the same quote form. California policies are placed directly; outside California the request is handled together with a partner agency in your state, and the shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Tell me about your lot. I'll shop it.
Your license type, inventory values and lot security are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued. Some policies may be placed with nonadmitted (surplus lines) insurers, which are not members of the California Insurance Guarantee Association (CIGA).
Tell me how to reach you. I’ll take it from there.
Takes about 30 seconds. I review every request personally and call you back, usually the same day.
(424) 552-4545Answered 24/7 · CA License #4348151
Get a reminder before your renewal.
Tell me when your policy renews and I’ll email you about six weeks before, when it’s worth comparing. One email, no calls.