“I am a Texas Auto Dealer.  What Insurance do I Need?”

Let’s begin with those areas determined by State Statue:

• $50,000 Dealer Bond. Dealer bonds provide limited protection for the public and range in premium from $150 up per bond term, depending on credit score and availability.  Dealer bonds respond to bad titles, bad drafts and bad checks up to the $50,000 limit.  Bonds are not insurance and, should there be a claim against your bond, you will be held liable for the payment – even if the bonding company pays the claimant.  If a claim is made against a dealer’s bond and the bonding company must make a payment in the dealer’s behalf, the chances of that dealer securing a future dealer bond become negligible.

• $85,000 Combined Single Limits Auto Liability. The auto liability coverage can provide protection for you, your employees, an uninsured customer up to state minimums and contract drivers when involved in an at-fault accident while operating a dealer-owned auto in conjunction with a dealer’s business.  $85,000 is the minimum limit and appropriate to a small fraction of the Texas Independent Dealer population.   Liability limits are available up to $1,000,000 CSL and Excess Liability contracts can extend that protection exponentially.  Some dealers utilize Excess Liability policies to inflate the limits to as much as $25,000,000 CSL, depending on individual assets, company structure and their attorneys’ recommendations.

• $85,000 Combined Single Limits Un/Under-insured Motorist Protection. Again, the $85,000 is the minimum required or must be rejected in writing.  Typically, UM/UIM limits are available up to the primary policy limits.  If involved in a non-fault auto accident, the under-insured motorist protection will apply in excess of the primary coverage provided by the at-fault party’s insurance.   For instance, the at-fault party carries $85,000 primary limits; those primary limits must be exhausted before your underinsured coverage will respond.  Once the underinsured coverage is triggered, additional protection is available up to whatever amount of underinsured coverage you carry.  In some states, a credit is taken against the insured’s UM limit for the amount of coverage provided by the at-fault party’s limit, but not so in Texas.  In other words, your limits are on top of the at-fault party’s limits.  The uninsured coverage will apply to non-insured at fault parties, as well as hit-and-run situations.

• $2,500 Personal Injury Protection. $2,500 is the minimum offered, but it can be increased to $10,000, depending on the carrier.    Personal Injury Protection is first-party insurance coverage that will pay the insured’s medical bills, lost earnings, and other financial losses when injured in a car accident, including lost wages and/or funeral expenses. PIP will also pay the passengers’ medical bills if they are hurt in the crash. In Texas, PIP coverage is required, but can be rejected in writing.

…And that keeps the State happy —-

 But barely scratches the surface of what you may need…

Stay Tuned for “What are my Exposures?”