Does car insurance cover dealer damage?

If your car was damaged at a dealership, you’re probably wondering if your auto insurance will cover it. This all depends on the coverage you have through your insurance company and if it applies to the situation.

Generally, collision coverage will cover an accident at an auto dealership if it was your fault. If you are in a car accident and it wasn’t your fault, then the person who caused the damage (whether it was the dealership or another customer) will be responsible for repairs. 

Read on to learn when your auto insurance company will pay for repairs and in what situations someone else’s insurance will pay. 

When will auto insurance pay for car damages at a dealership?

Dealership lots are packed full of cars, making it easy to get into an accident if you aren’t careful. 

Some of the common incidents that happen at dealerships are:

• Fender benders
• Side-swiping another car
• Backing into a vehicle

If you caused the accident at the dealership, your state-required liability insurance would cover any damages to other vehicles. However, you won’t be able to get repairs paid for your vehicle unless you have collision insurance. 

What is the collision insurance coverage?

Collision insurance covers any damages to your vehicle from hitting an object or another vehicle. For example, if you back into a car at a dealership or dent your car on a light pole, your collision insurance will cover the damages to your vehicle. 

If you aren’t sure what all your insurance covers, you should call and talk to a representative at your insurance company. The representative will be able to check your coverage and determine if the insurance company will pay your claim. 

Is it always worth filing a claim?

Knowing when and how to file a car insurance claim is important because it can affect your rates, especially if you are t fault for an accident.

In some cases, it may not be worth filing a claim if your deductible is high. For example, if you dented your car on a pole at the dealership and it costs $400 to fix, but your deductible is $500, it’s not worth filing a claim. 

Even if you filed a claim, you would pay the total $400 because your deductible hasn’t been met. And since it would be considered an at-fault accident, this can cause your insurance rates to go up, even if the insurance company won’t put anything towards repairs. 

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When will auto insurance not cover your vehicle?

Even if you have collision insurance, there are two situations where your auto insurance may not cover your car’s damages. In both of these cases, it is because someone else is responsible for the accident.

Below, we’ve covered the two instances in which someone else needs to pay for your car’s damages other than your insurance company.  

Dealership Damaged Your Car

If the dealership damaged your car, then the dealership’s insurance should be the one paying for your car’s repairs. Most dealerships are required to carry liability insurance, as accidents sometimes happen in a parking lot jam-packed with vehicles. 

Let’s say you left your vehicle at the dealership to test drive a new car. If an employee at the dealership accidentally backs into your vehicle with a dealership car, the dealership’s insurance company will be responsible. 

If your new car was damaged at the dealership before you took it home or after you brought it in for service, again, the dealership’s insurance should pay.

Dealership Customers Damaged Your Car

Another situation where your insurance isn’t responsible for damages would be if another customer hit your car. Since it wasn’t the dealership’s fault, the other customer’s insurance is liable for the damages. 

The two insurance companies will communicate to determine who is at fault and payout money for damages accordingly. 

If someone hits your car and drives off, the majority of the time, the dealership will have cameras. The police can check these cameras, so you should file a police report right away. 

Real-Life Case Studies: Car Insurance Coverage for Dealer Damage

Case Study 1: John’s Collision Coverage

John was test-driving a car at a dealership when he accidentally rear-ended another vehicle. The collision resulted in damage to both cars. Fortunately, John had collision coverage on his car insurance policy. He promptly reported the accident to his insurance company and provided them with all the necessary information.

His insurance company assessed the damage and determined that it was a covered incident under his collision coverage. As a result, John’s insurance company paid for the repairs to both vehicles, ensuring that the dealership’s car and the other driver’s vehicle were restored to their pre-accident condition.

Case Study 2: Sarah’s Liability Insurance

Sarah had dropped off her car at a dealership for routine maintenance. While in the dealership’s possession, a technician accidentally backed another car into Sarah’s vehicle, causing significant damage. Sarah didn’t have collision coverage on her car insurance policy, but she did have liability insurance, which covers damages caused to others.

In this case, since the dealership was responsible for the damage, Sarah’s liability insurance would not apply. Instead, the dealership’s insurance should cover the cost of repairs. Sarah promptly contacted the dealership and informed them about the incident, requesting that they file a claim with their insurance company to cover the necessary repairs.

Case Study 3: Mark’s Uninsured Motorist Coverage

Mark visited a dealership to test drive a car. While he was inside the dealership, an uninsured driver crashed into his parked vehicle, causing extensive damage. Mark quickly realized that the responsible party did not have insurance to cover the damages. Fortunately, Mark had uninsured motorist coverage as part of his car insurance policy.

He contacted his insurance company, reported the accident, and provided all the relevant details. Since the uninsured driver was at fault and unable to cover the repairs, Mark’s insurance company processed his claim under his uninsured motorist coverage.

As a result, Mark’s insurance company paid for the repairs to his vehicle, ensuring that he didn’t have to bear the financial burden caused by the uninsured driver.

The Final Word on Damages at a Dealership

If you are responsible for the damages to your vehicle at the dealership, then your auto insurance company will cover you if you have the right coverage on your policy. If someone else caused the damage to your car, their insurance company is responsible for paying for the damages. 

Contact your insurance company to learn all of the details on your current policy. If you’re unhappy with your current car insurance or think you might be overpaying, you should request quotes from other insurance companies to find the best rates in your area to make sure you are properly protected.

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