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Auto Dealer Insurance in Florida for Used, Wholesale and Independent Dealers
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7 months ago
Excellent service and very professional staff. They made the process easy, answered all my questions, and helped me find the right coverage. Highly recommended!
3 months ago
I’ve worked with Ray for years and he’s always reliable and has been able to help my clients in need! I can always count on him to provide the best insurance advice and service
7 months ago
Great service, and always looking out for my commercial insurance. Thank you Ray
3 months ago
Great insurance agent to work with. Ray is the best!
3 months ago
Reviews reflect individual customer opinions and experiences. They do not guarantee specific coverage, pricing, service timing, or claim outcomes.
Dealer insurance is built from several policies and limits. A Florida dealer can have inventory on the lot, customers test-driving vehicles, employees moving cars to auctions and shops, customer or consignment vehicles in its care, dealer plates on the road, an office full of customer financial paperwork and sometimes repair or detailing operations. Each one changes the submission.
We write dealer-related insurance and help with dealer bonds, but we start with the same rule every time: tell us exactly how the dealership operates. A wholesale dealer that buys and sells at auction, an independent retail dealer with a busy lot and a dealership with a service department are not the same risk, and underwriters price and write them differently.
What insurance does a car dealer need?
Depending on the operation, a dealer program may include:
- Garage liability (or general liability combined with a business auto policy) for bodily injury and property damage arising from dealership operations and vehicle use
- Dealer open lot or dealer physical damage coverage for inventory held for sale
- Garagekeepers for customer, consignment or other people's vehicles in your care
- Commercial property for the building, office contents, signs and equipment
- Workers' compensation for salespeople, lot attendants, porters and service staff
- Dealer errors and omissions for certain claims arising from sales and paperwork
- Crime and cyber coverage for cash, employee theft and customer data
- Umbrella for higher liability limits, where available
The final combination depends on the dealership. If the dealer transports vehicles, performs repairs, rents vehicles or stores customer property, disclose those operations before binding. The carrier decides eligibility, terms and price after underwriting.
Florida insurance and bond requirements for car dealers
Florida law sets licensing requirements for motor vehicle dealers in section 320.27, Florida Statutes. Subsection (3) says the dealer license application must include evidence that the applicant is insured under a garage liability insurance policy or a general liability insurance policy coupled with a business automobile policy, which shall include, at a minimum, $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 personal injury protection. Subsection (10) requires a motor vehicle dealer to deliver a surety bond or irrevocable letter of credit in the sum of $25,000, annually, before a license is issued. Salvage dealers and other license types have their own rules.
These are licensing minimums. They are not a recommendation for how much liability limit a dealership should carry, and lenders, floor plan companies, landlords and auctions may ask for more. Always check the current FLHSMV application and instructions for your license type before you apply, because forms and procedures can change.
- Florida Statute 320.27: flsenate.gov/Laws/Statutes/2026/320.27
- FLHSMV dealer license application (HSMV 86056): flhsmv.gov/pdf/forms/86056.pdf
- FLHSMV dealer surety bond form (HSMV 86020): flhsmv.gov/pdf/forms/86020.pdf
- FLHSMV dealer forms and resources: flhsmv.gov/motor-vehicles-tags-titles/dealers-installers-manufacturers-distributors-importers/mv-rv-mh-dealer-broker-licenses/forms-and-resources
See also: How to Get a Car Dealer License
Garage liability for auto dealers
Garage liability addresses eligible liability exposures arising from the dealership's operations: a customer tripping on a wheel stop on the lot, a salesperson backing a car into a customer's vehicle, or an employee driving inventory to a detail shop and causing an accident. It should be reviewed alongside how the dealership uses employees, drivers and dealer vehicles.
Driver information matters. Owners and employees who move inventory or take vehicles on the road are usually part of underwriting, and motor vehicle records may be requested. A driver with serious violations can affect eligibility for the whole account, so tell us about every person who drives before the policy is bound.
See also: Garage Liability Insurance
Dealer open lot coverage for your inventory
Dealer open lot coverage is property coverage for vehicles held for sale. It is separate from liability to a customer and from garagekeepers on customer-owned vehicles.
Limits should reflect the highest inventory value that may be on the lot at one time. Think about auction weeks, tax season and any time you stock up. Many forms apply a per-vehicle limit and a per-location limit, and some require regular inventory reports.
Florida weather and theft drive most open lot questions. Hail, wind and flood can damage many vehicles at once, and some forms carry separate deductibles for these events or limit coverage once a storm is named. Theft of vehicles and of catalytic converters, wheels and tires is another common exposure. Some dealer forms also offer false pretense coverage as an option, which can address certain losses when a vehicle is obtained through fraud, such as a bad payment; it is not automatic, so ask about it.
For example, if a storm floods a low corner of the lot and eight vehicles take water, the claim may be reviewed under the dealer physical damage coverage, depending on whether flood is included, the deductibles and the per-location limit.
Garagekeepers for customer and consignment cars
If the dealership keeps customer vehicles, consignment vehicles or trade-ins not yet titled to the dealer, garagekeepers may need to be reviewed. A service department, detailing operation or valet-type custody also creates this exposure.
Garagekeepers usually comes in two basic forms. Legal liability pays only when the dealership is legally responsible for the damage, for example because of an employee's mistake. Direct coverage can pay for covered damage regardless of fault; direct excess pays after the customer's own insurance, and direct primary pays first. The right choice depends on how many customer cars you hold and what your customers expect.
See also: Garagekeepers Insurance
Dealer plates and test drive coverage
Dealer plates and test drives are underwriting issues. Tell us who uses the plates, who may drive, how test drives work, whether employees take vehicles home and whether vehicles move between locations or to auctions.
Do not assume the plate itself creates insurance. The insurance arrangement needs to support the permitted use, and the carrier must know how vehicles are used. For test drives, ask whether a salesperson rides along, copy the customer's driver license, confirm the customer's own insurance and set a route and time limit. If a customer crashes during a test drive, which policy pays first can depend on the policies involved and Florida law, so review this with us and read the policy.
See also: Florida Transporter and Dealer Plates
Dealer E&O, crime and customer data
Dealers handle titles, lien payoffs, disclosures, warranties, add-on products and financing paperwork. Dealer errors and omissions coverage may respond to certain claims that arise from mistakes in that process, such as a title or lien error, depending on the form. Some E&O forms address specific consumer claims, often with sublimits or exclusions. Truth in lending, odometer and disclosure rules are legal compliance matters, so review your procedures with your attorney; insurance does not replace compliance.
Crime coverage can address employee theft of cash or deposits and certain fraud losses. Because dealers collect driver licenses, Social Security numbers and bank information, cyber coverage for data breach response is also worth discussing.
Used, wholesale and independent dealers: what changes
A retail used-car dealer has public foot traffic, test drives and more customer paperwork. A wholesale operation may have little retail exposure but moves more inventory between auctions and dealers, which increases driving exposure. A buy-here-pay-here operation adds repossession questions. A dealer with repair, body, detailing or towing services adds another layer of garage exposure.
Do not pick a dealer policy based only on the license type. We also need to know what the business does day to day.
See also: Auto Repair Shop Insurance
How to lower risk at a dealership
- Lock keys in a key box or key control system and log who takes each key
- Fence and light the lot, use cameras and consider wheel locks or GPS on higher-value units
- Keep a written test drive procedure and follow it every time
- Run driver records on employees before they move inventory
- Keep a hurricane plan for moving inventory to higher ground or a secure location
- Double-check title, lien and disclosure paperwork before delivery
What affects auto dealer insurance cost
Pricing can be affected by dealer type, inventory values and peak values, sales volume, lot location and flood exposure, security, number of drivers and their records, test drive procedures, dealer plates, prior claims, repair or detailing operations, requested limits and coverage selections. Dealer open lot and garagekeepers values can materially change the premium.
See also: Commercial Insurance Cost in Florida
What we need for a dealer quote
Prepare the legal business name, license type or planned license, dealership location, expected annual sales, average and maximum inventory count and value, owners and employees who drive with their driver license information, number of dealer plates, test drive process, security details, prior coverage and loss runs, service or repair operations, requested limits and any lender, floor plan or licensing requirements.
See also: Florida Commercial Auto Quote Checklist
Frequently Asked Questions
What kind of insurance do I need for a used car dealership?
Common needs include garage liability (or general liability with a business auto policy), inventory or open lot coverage, test drive and dealer plate considerations, garagekeepers when applicable, property and workers' compensation. The combination depends on the operation.
Do used car dealerships require full coverage insurance?
The phrase full coverage is not a useful dealer insurance term. A dealership needs the specific coverages required by its operation, licensing, lenders and contracts, reviewed one by one.
Are used car dealers required to carry insurance in Florida?
Yes. Section 320.27, Florida Statutes, requires evidence of garage liability insurance or general liability coupled with a business auto policy meeting the minimums in the statute for a dealer license. Check the current FLHSMV instructions for your license type.
Does dealer insurance cover customer test drives?
Test drives must be contemplated by the policy and disclosed to the carrier. The carrier may require driver controls or other underwriting information, and which policy pays first can depend on the policies involved.
Is a dealer bond the same as insurance?
No. The dealer surety bond is a licensing requirement that protects others if the dealer fails to meet certain obligations. The dealership's liability and property insurance serve different purposes.
Do you need insurance with dealer plates?
Insurance and permitted plate use should be reviewed together. A plate does not replace the need for the correct insurance arrangement.
Does open lot coverage include hurricanes and floods?
It depends on the form. Some dealer physical damage forms include wind and flood with separate deductibles, some limit coverage once a storm is named and some exclude flood. Review the policy before hurricane season.
How much does auto dealer insurance cost?
In real quotes our agency has run for Florida businesses, general liability for auto repair shops and dealers has run $600 to $7,000 a year, and garage liability $900 to $9,500 a year. Coverage for your lot inventory (dealer open lot) and for customer vehicles (garagekeepers) is quoted case by case. Inventory values, drivers and test drives, location and claims history move the price most. See the price guide for the full ranges.
About the Author
Raymundo Guzman
I’m Raymundo Guzman, an independent insurance agent and the owner of Covered by Guzman. I help business owners across Tampa Bay and central Florida find commercial auto, general liability, workers’ compensation, and related business coverage that matches how they actually operate, comparing options across the carriers available to me rather than selling one company’s product.
Independent Insurance Agent · License #W512374 | NPN #18906048 · 813-302-7151
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