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

Auto insurance will cover your car’s damages at a dealership if you caused the accident and carry collision coverage. If someone else caused the accident, their insurance is responsible for repairs. Find out how to make sure you're covered in this situation.

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UPDATED: May 31, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: May 31, 2022Fact Checked

Here's what you need to know...

  • Collision coverage will cover you if you hit another vehicle or object at a car dealership
  • If the dealership or another customer damaged your vehicle, their insurance would pay for repairs 
  • If someone hit your car and drove off, most dealerships have cameras that police can check

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 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. 

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.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

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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Written by Laura Berry
Former Insurance Agent Laura Berry

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

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