Used Car Dealers Insurance – Don’t forget your DOC protection

Used car dealers insurance is a specialized coverage and few agents understand it. So how many used car dealers are getting it wrong when it comes to drives other car coverage? The answer is most all of them. If you are a used car dealer and you operate as a corporation, partnership or LLC, you might be leaving yourself open to a huge exposure if you haven’t tackled the drives other car coverage.

Drives other car coverage is simply an endorsement that you can add to your garage liability policy to extend coverage for you individually to the cars that you may drive that you don’t own or that you rent. Almost every personal auto policy in almost every state provides this protection automatically. And the garage policy does as well if you have symbol 21 on that policy. For more information about the garage symbols and what they means, click here.

So what is the problem? The problem is that this protection for hired and non owned vehicles is extended to the named insured, not the driver. So, if your dealers insurance policy is written in the name of your corporation, or your LLC or partnership, then this coverage is only extended to that entity and not to you as an individual. Perhaps an example will help explain the real risk and pull back the veil a bit on this DOC mystery.

Let’s say you are a used car dealer and your garage insurance policy is written in the name of your corporation, Joe’ Used Car, Inc. Because you always drive a car with the dealer tag on it, you don’t worry about purchasing a personal auto insurance policy. Now, let’s say one day you need to borrow your neighbor’s car and while doing so you are involved in an accident that is your fault. Assume the costs of this accident are $100,000 and your neighbor only carries $50,000 coverage on his personal auto insurance policy. Now if you had your own personal auto insurance policy then that policy would step up and provide the excess coverage of $50,000 that you need personally for this accident. And, your garage policy will do this also, but, only in regards to protecting the named insured on that garage policy which is Joe’s Used Cars, Inc, not you.

This scenario gets even worse if your neighbor had let his auto insurance lapse because he forgot to pay his bill. Now you are on the hook for the full $100,000. And that would be a very nasty surprise for you.

So what is the solution? Well, you can purchase DOC coverage. DOC stands for Drives Other Cars. This will name you as the individual protected by this endorsement and will extend the coverage of your garage insurance to you individually for cars that you drive that you do not own or that you rent. Now, the odds of needing this protection are in some ways, admittedly long odds. But the cost of the protection is pretty low and the uncovered loss could be enough to bankrupt you. So, if you don’t have a personal auto policy in your name, and your garage policy is in a business name, take a moment to check your policy to be sure that you have purchased DOC protection.

At Clinard Insurance Group in Winston Salem, NC, we specialize in helping used car dealers in NC, SC, GA, VA and TN. We want all of our dealers to be informed consumers. If you need help with your used car dealers insurance, or if you just want to speak with an agent that specializes in your business, please give us a call, toll free, at 877-687-7557 or visit us on the web at www.TheAutoDealersHelper.com.

The source information for this article can be found at www.InsuranceAnswerGuy.com.

North Carolina Used Car Dealers – The Garage Insurance Policy That You Started With May Not Be The Right One Today.

North Carolina used car dealers insurance starts with the garage insurance policy. Many new start ups find their way to an agent who is able to help them set up their garage policy and the begin selling cars. And for many used car dealers, they just pay their renewal premiums each year without realizing that time is on their side. You see, because of a law in North Carolina that requires insurance companies to offer you a policy when you ask for a quote, there is a two tiered system of policies in North Carolina. If you haven’t checked lately, you might be in the high risk rate class and not even realize that you are paying too much for your garage liability dealers insurance policy.

Since NC is a mandatory insurance state, all dealers who ask for an auto insurance quote must be offered coverage. For this reason, most insurance companies can write a dealers policy but if they don’t specialize in used car dealers insurance, they will simply place your garage insurance policy through the state reinsurance facility. This means you will have to pay the highest possible rate and you will face limited choices on how much liability insurance you can purchase. And last of all, this market of last resort doesn’t offer you any dealers open lot coverage so you won’t be able to purchase comprehensive and collision insurance on your inventory.

Even insurance companies who specialize in used car dealers insurance in North Carolina may still place your policy in the higher rated North Carolina reinsurance facility. Why would they do this? Well there are several reasons and the reasons certainly change over time. As I write this we are seeing many dealers forced to offer buy here, pay here financing in order to sell their cars. The insurance companies don’t like this as it increases the chances that the dealer will be involved in repossessing a vehicle and the claims and losses that might be associated with that activity. So, since they have to offer insurance at some price to those that call, guess what, if you do buy here, pay here financing, you may find yourself in the NC reinsurance facility.

Another reason dealers end up in the facility pool with its higher rates is that they simply have not been in business long enough to develop a track record that helps the insurance company feel comfortable with their business practices. Some companies require as much as 3 years experience before they will move a dealer into their preferred rates policy. I have also seen this problem apply to dealers who wholesale vehicles and never take title to or possession of the vehicles they are selling.

If you are a dealer who used to do on site financing, wholesale, or if you simply bought your current policy when you had less than 3 years in business, there is a good chance that you might now qualify for better coverage at lower rates. You might not be able to find these preferred policies from your current agent though. The reason for this is that insurance for used car dealers is a specialty market and most agents just don’t have access to the preferred policies for used car dealers.

At Clinard Insurance Group in Winston Salem, NC, we specialize in used car dealers and we insure over 300 dealerships across 5 different states. If we can help you with an insurance second opinion on your garage insurance, or if you would like for us to give you a quote on your dealership insurance, please call us, toll free at 877-687-7557 or visit us on the web at www.TheAutoDealersHelper.com

The source information for this article can be found among the many articles at www.InsuranceAnswerGuy.com.