Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 29, 2020

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Key takeaways...

  • If you are a car dealer, you should consider whether your insurance is adequate to meet the needs of your job
  • Find out if you will be driving a company car or your own car
  • You may need GAP insurance to cover a company car if the insurance is not enough
  • Look also at your car insurance for your car and add optional coverages if needed

Are you a car dealer who is looking for a great deal on auto insurance? It can be difficult to know which insurance company is best when you are spending so much of your time driving or showing vehicles to potential customers.

The type of insurance that you need will be determined to a large degree by how much you drive a company car and how much you drive your vehicle.

In some cases, you may be assigned to a company car for the dealership. In these cases, you may have insurance that your vehicle dealership puts on the company car but it may not be enough to cover you under certain circumstance.

One fact that dealers should keep in mind is that driving a company car to car shows and other locations will have similar terms to a lease agreement. These terms mean that it may only carry essential types of coverage such as bodily injury and damage liability.

When you are driving a company car as a dealer, you will want to find out what type of insurance is covered on the vehicle you are driving.

Then you may want to look into other types of insurance coverage.

Enter your zip code above to begin comparing car insurance rates.

Mandatory and Optional Coverage Types

First and foremost, you will need to make sure that you have adequate state minimum coverage that is required in your state of residence. This coverage usually includes having bodily injury and property damage liability, which are the minimums required by law.

Other optional coverages include:

  • Uninsured/underinsured – Uninsured and underinsured insurance covers damages and injuries that you sustain if you are involved in an accident that is caused by someone else who is not properly insured.
  • Medical coverage – Medical coverage covers expenses of a medical nature that arise as a result of injuries you sustain in a car accident.
  • Roadside assistance – Roadside assistance is good insurance to have if you are ever stranded on the side of the road. These types of programs usually allow you to get immediate roadside help within about a 50-mile radius. It is also relatively inexpensive insurance that may well be worth the extra cost.
  • Car rentals – Car rental insurance allows you to have a rental car in the event that you have to have your car repaired and are without a vehicle.
  • ComprehensiveComprehensive coverage is coverage that takes care of things that are not covered by other types of insurance. It normally covers vandalism and theft, as well as acts of nature, and other damage that is not due to an accident.

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What is “GAP” coverage?

GAP coverage is defined as a type of insurance coverage that covers the difference between the actual cash value of a vehicle and the amount that of the value of a car that is still being financed.

This option would be an ideal extra coverage for car dealers to get because the entire value is not covered in many cases.

When you are driving a company car, it is likely that the company car that you are driving will only be insured for the minimum required coverages. So it may be to your advantage to add your GAP insurance to the policy.

If you do decide to add extra coverages to the policy, it is your responsibility to inform the insurance company of the original insurer of the lease or dealership car so that they will be aware of the extra supplemental coverage.

Temporary Insurance

You may want to consider a “temporary insurance” or a “cover note,” especially if you are between vehicles or if you are just getting the insurance for a period of one-28 days.

A cover note is normally used to provide proof of insurance while you are getting your official paperwork in order but it can also refer to temporary insurance that is serving as your insurance while you shop for a more permanent insurance.

The type of insurance you decide to get as a car dealer will vary greatly from person-to-person. It depends on some factors including the following:

  • How much coverage the dealership owner has on the company car – If your dealer has insurance on the company car, ask them to see what the coverages include. They shouldn’t mind that you want to make sure you are taking care of yourself as well as the company vehicle when it comes to insurance.
  • Whether you drive your car or the dealership’s car – If you drive your car most of the time, then your insurance should suffice. If it is a company car, treat it like a lease and get GAP or temporary insurance if needed to cover all risk factors.
  • Your risk factors such as distance and demographics – If you travel long distances to show cars from the dealership you own or work for, you may want to increase your level of insurance to cover this. Include comprehensive insurance, especially if you are going to traveling to unknown locations where your car could be prone to break-ins or vandalism and theft.
  • Your driving record – Whether you are a dealer or not, your driving record is the single most influential factor that influences your premium costs. It is also important that you keep your driving record in good shape to avoid an escalation in premiums.

The best thing to do if you are a car dealer is to find out what type of policy is on the car you may be driving for the company. Then also see if you need some GAP insurance to cover the difference.

Finally, first check to make sure your vehicle has ample coverage to meet your state mandates as well as any optional coverages that will protect you from life’s unforeseen circumstances.

Use our free car insurance comparison tool to see the rates of top companies and find an option that would work for you.


  1. https://www.naic.org/state_web_map.htm
  2. https://www.investopedia.com/articles/personal-finance/120715/when-should-you-pay-those-pesky-car-rental-fees.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
  3. https://en.wikipedia.org/wiki/GAP_insurance
  4. https://www.thebalance.com/how-to-get-your-driving-record-527249
  5. https://www.consumerreports.org/cro/news/2011/05/top-10-tips-for-finding-the-right-car-insurance-policy/index.htm