Will my auto insurance cover my car if it is damaged at a dealership?

What happens when your car is damaged at a dealership depends on who the damage is caused by, and what type of insurance you have.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: May 4, 2022

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Here's what you need to know...

  • All sorts of scenarios can cause damage to your car while you are at a dealership
  • There are also many types of auto insurance to cover your car, depending on the circumstance
  • Do your research and make sure you have the right type of coverage

Car insurance is designed to help individuals and businesses in their time of need. It is important to be prepared when something happens to your vehicle. So if your car is damaged at the dealer, you might assume that you can claim it on your auto insurance policy.

Generally speaking, either your insurance policy, the dealer’s liability policy, or someone else’s entirely might kick in to pay for the damages.

Read on to learn what happens in some of the various car dealership accident scenarios.

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When the Damage is Caused by the Dealership

What happens if a dealership damages your car? Can you sue a dealership for damaging your car? Was it a faulty repair issue or do you have a defective vehicle? A lot of coverage questions are answered based on who is at fault in an accident or damage-causing event.

Typically, an auto accident is covered by the person who caused the damage. So in most cases, if a dealer damaged your car during services, they would be the one to pay the cost of repairs.

However, in some states, both parties’ insurance pay for their own damage. The state you live in will have a bearing on this.

There are many different reasons that your car could receive damage while at a dealer. If you car is there for repairs, it could be damaged:

  • In the garage
  • By the mechanic who is driving your vehicle
  • In the waiting area

If you are at a dealer looking at new cars, you could have an accident in the parking lot with another vehicle or even with one of the cars on the lot.

Whatever the reason for the damage, if it was caused by the dealership, their insurance liability should cover the damage.

If a dealership only has legal liability, then the negligence of the dealer is covered.

Although if it is your fault, no coverage will be available. If the dealer has direct coverage, no matter what happens on the dealership lot or whose fault it is, it will be covered.

If you are going to leave your car at a dealership for any length of time for a repair, you should ask what insurance coverage they have. Even if your car will only be there while you test drive another car, you may still want to ask about their insurance coverage should something happen to your vehicle.

Many times dealership parking lots and garages are packed tightly with cars, so you can never be too careful.

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When the Damage Is Your Fault

If the damage caused by an accident on the dealership property is your fault, your insurance might cover it depending on what type of coverage you have and what type of accident you had.

Most accidents on a dealership lot will be fender benders. Typically no one is driving fast, and even though space is tight, not a lot of cars are moving around.

Depending on the type of insurance you have, certain areas and scenarios will be covered. Here are a few examples:

  • Liability Coverage — only pays for damage to the property of others, not your own vehicle
  • Comprehensive Coverage — the most extensive type of coverage protecting you in the case of an accident, natural disaster, vandalism, or any other event
  • Collision Coverage — if you are in an accident with another vehicle or collide with another object

Should you have an accident at a dealership that is your fault, you can file a claim with your company for the damage and related vehicle repairs. If the fault is hard to determine, you may want to do a 50/50 fault claim or speak with the dealership about their liability insurance situation.

It can be tricky to determine what to do in a situation like this, so you can contact your insurance company as well.

Do You Have the Right Auto Insurance Coverage?

This information may lead you to ask if you have the right coverage. Should something happen at a dealership or anywhere else you want your finances to be protected.

Not having the right coverage will put you at financial risk or risk of losing your vehicle. Having the proper coverage will protect you and your assets, and prevent the need to consider extensive legal action.

The best way to see if you have all the coverage you need is to compare several different companies online.

Using an online comparison tool can help you see what different companies have to offer. Just enter your information once, answer a few simple questions, and receive quote and rate information quickly.

A quote tool saves you a lot of time and energy by not having to search website to website or make phone calls.

You can compare rates, coverage, and quotes side by side with our comparison tool today to make sure you have the coverage you need.

Enter your zip code below to start your free online car insurance comparison now!

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