Can I use my personal auto insurance for flipping?

No. Personal auto policies exclude business use. If you have an accident while test driving or transporting flip inventory, your claim will be denied and policy canceled. Any vehicle in your business needs proper commercial coverage.

What is garage liability insurance?

Garage liability covers your business for accidents involving vehicles you own for sale, damage during test drives, and injuries on your property. It's the foundation of dealer insurance and costs $1,200-$3,000 annually depending on volume.

Do I need a dealer bond?

Most states require a surety bond for dealer licensing. The bond protects consumers against fraud. Bond amounts range from $25,000-$100,000, but you pay a percentage (typically 1-3%) as your annual premium—usually $200-$500.

Should I insure my inventory?

Inventory insurance (physical damage coverage) is optional but recommended if you hold vehicles with significant value. It covers theft, vandalism, and weather damage. Cost depends on inventory value—typically $800-$1,500 annually for $50,000-$100,000 coverage.

Insurance for Car Flippers 2025: Coverage Options & Cost Guide

Why Proper Insurance Matters

Many new car flippers assume personal auto insurance covers their activities. It doesn't. Operating without proper coverage means one accident can destroy your business and personal finances.

Personal Policy Exclusions

Personal auto insurance policies exclude business use. If you're in an accident while test driving inventory or transporting a flip car, your claim will be denied and your policy canceled. Don't risk it.

Types of Coverage Needed

Garage Liability Insurance

This is the foundation of dealer insurance. Garage liability covers accidents involving your inventory, test drive incidents, and injuries on your property. Most policies include $500,000-$1,000,000 in liability coverage.

Dealer Surety Bond

Required for dealer licensing in most states. The bond protects consumers against dealer fraud. You don't pay the full bond amount—just a percentage based on your credit score and business history.

Physical Damage / Inventory Insurance

Optional coverage for your inventory against theft, vandalism, fire, and weather damage. Recommended if you hold significant inventory value. Deductibles typically run $500-$1,000.

General Liability

Covers non-auto incidents: customer slips on your lot, property damage during vehicle transport, etc. Often bundled with garage liability.

Cost of Protection

Full coverage for a small flipping operation costs $2,500-$4,000 annually. That's roughly the profit from one or two flips—insurance pays for itself with a single avoided claim.

Finding Insurance

Not all insurance companies write dealer policies. Look for agents specializing in commercial auto or dealer insurance. Nationwide, Progressive Commercial, and specialty agencies like J.C. Taylor offer dealer policies.

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Essential Business Protection

Pros

Protects against catastrophic loss
Required for dealer licensing
Enables legitimate business operation
Reasonable cost relative to risk

Cons

Adds ongoing business expense
Some coverage options complex
Finding dealer-savvy agents challenging

Recommendation

Proper insurance is non-negotiable for serious car flippers. The cost of one uninsured accident far exceeds years of premium payments. Get covered before you flip another car.

Frequently Asked Questions

Flipper Guides

Dealer License Requirements 2025