Garage liability insurance and dealer bonds
Garage liability insurance
Dealer liability minimums
- Bodily injury / person
- $25,000
- Bodily injury / accident
- $50,000
- Property damage
- $25,000
Blanket liability must cover vehicles owned by or associated with the dealership. A $75,000 combined single limit is also accepted.
Insurance requirementsDealer bond
$50,000
Bond face amount. The premium you pay is priced separately.
Add a bond quote to your dealer insurance application.
Bond requirementsIn Alabama, insurance and licensing requirements depend on your dealer category. Independent used-auto, wholesale, broker, RV, motorcycle, truck and boat businesses can have different requirements. Confirm your license category with Alabama Department of Revenue (ALDOR).
Insurance and proof of coverage
Dealer liability minimums: $25,000 bodily injury per person, $50,000 bodily injury per accident and $25,000 property damage.
Blanket liability must cover vehicles owned by or associated with the dealership. A $75,000 combined single limit is also accepted.
UM, UIM and medical coverage
BI means bodily injury. PD means property damage. For example, 25/50 BI means $25,000 per person and $50,000 per accident.
- Uninsured motorist (UM)
- May be rejected in writing
- Underinsured motorist (UIM)
- Included in UM; may be rejected
- PIP / first-party medical
- Not required
UM coverage includes underinsured-motorist protection. The named insured may reject it in writing; it is not automatically absent just because the dealer buys minimum liability limits.
Your lease, lender or exposure to a serious accident may call for higher limits. Garage liability does not automatically insure the value of inventory or customers’ vehicles.
The dealer bond is a separate requirement
Continuous dealer bond; also satisfies the designated-agent bond requirement.
The bond amount is its face amount, not the price you pay. A surety prices the bond separately, and you may have to reimburse it for claims it pays. A dealer bond does not replace garage liability or inventory insurance. You can add a bond quote to the dealer insurance application.
State licensing fees
| State fee | Amount |
|---|---|
| Master dealer license | $125 |
| Each additional location | $5 |
| Off-site sales license | $25 |
These state fees are separate from insurance and bond premiums. Other licensing and startup expenses may apply. Confirm the payable amount in the current state application or portal.
A practical filing detail
A change of location needs updated proof of insurance. Keep the business and location information consistent in MyDMV, the bond and the insurance certificate.
What does dealer insurance cost in Alabama?
The dealer liability filing is one part of the price. For inventory coverage, the lot address, vehicles kept outside, storm exposure and the way keys are secured also matter. A higher-value inventory can change the quote even when the plate count stays the same.
Real quotes issued by our agency, Pro Risk Solutions dba dealership.insure. Your price depends on your dealership and coverage.
| Dealer example | Annual premium | Down payment | Monthly payments | Coverage |
|---|---|---|---|---|
| Alabama Startup dealer Without inventory coverage | $1,386 | $174 | 9 payments of $152 | $75,000 garage liability per accident. Inventory coverage not included. |
| Alabama Established dealer Liability + inventory | $3,380 | $1,037 | 9 payments of $293 | $75,000 garage liability per accident. $98,000 inventory limit; $35,000 maximum per auto. |
| Alabama Startup dealer Liability + inventory | $5,251 | $1,620 | 10 payments of $414 | $75,000 garage liability per accident. $75,000 inventory limit; $40,000 maximum per auto. |
| Alabama Established dealer Liability + inventory | $11,914 | $3,450 | 9 payments of $1,045 | $1,000,000 garage liability per accident. $250,000 inventory limit; $25,000 maximum per auto. |
Alabama $1,386 example: coverage and business details
New business · 1 dealer plates · $75,000 garage liability per accident.
Inventory coverage not included.
State requirements and official sources
Quoted September 30, 2026.
Alabama $3,380 example: coverage and business details
1 year in business · 0 employees, excluding owners · 2 dealer plates · $75,000 garage liability per accident.
$98,000 inventory limit; $35,000 maximum per auto.
$500 liability deductible. Collision and other covered causes: $1,000, with a $5,000 event maximum shown in the shared deductible schedule. Wind/hail, earthquake and flood: $1,500, with no aggregate maximum. Theft: $1,500.
State requirements and official sources
Quoted September 17, 2026.
Alabama $5,251 example: coverage and business details
New business · 4 dealer plates · $75,000 garage liability per accident.
$75,000 inventory limit; $40,000 maximum per auto.
$1,000 liability deductible. Collision: $1,000 per auto. Other covered causes: $1,000 per auto / $5,000 per event. Theft: $2,500 per auto / $12,500 per event. Wind/hail and flood: $1,000 per auto, with no event maximum.
State requirements and official sources
Quoted July 30, 2026.
Alabama $11,914 example: coverage and business details
5 years in business · 9 dealer plates · $1,000,000 garage liability per accident.
$250,000 inventory limit; $25,000 maximum per auto.
$50,000 garagekeepers legal liability, with a $25,000 per-auto maximum; $5,000 auto and premises medical payments; $100,000 damage to rented premises; $1 million personal/advertising injury.
$500 liability deductible. Collision and other covered causes: $1,000 per auto / $5,000 per event. Blanket collision limit: $250,000 with a $1,000 deductible. Wind/hail, earthquake, flood and theft: $1,500, with no aggregate maximum.
State requirements and official sources
Quoted August 24, 2026.
Alabama dealer insurance costs and coverage comparison · What affects your insurance premium
Get your dealer insurance quote
Complete the dealer insurance application online. You can add a dealer bond quote in the same application.
Keep reading
Sources & resources
- ALDOR dealer license FAQs
- Code of Alabama 40-12-398
- Alabama DOI: automobile insurance requirements
- Alabama DOI: insurance terms and optional UM/UIM
- Federal court: Alabama UM/UIM rejection requirement
Policy wording controls actual coverage.