Florida Dealer Insurance Requirements Explained with Real Examples

Florida dealers must carry garage liability insurance with a minimum $25,000 combined single limit (CSL) for liability plus $10,000 personal injury protection (PIP). Let’s break down what this means with real examples.

Disclaimer: This content is for informational purposes only and does not constitute legal, financial, or insurance advice. Requirements may change. Verify current rules with FLHSMV or a licensed professional.

Who this applies to

• Florida independent and franchised motor vehicle dealers.
• Startups preparing license applications that require proof of insurance.
• Existing dealers renewing policies or adjusting limits after growth.

Understanding the minimum coverage amounts

FLHSMV requires all licensed motor vehicle dealers to maintain garage liability insurance with at least a $25,000 combined single limit (CSL) for liability, plus $10,000 PIP. Many dealers choose higher split limits (e.g., $100k/$300k/$50k) or an umbrella for additional protection.

Real-world example: Test drive accident

Scenario: A customer is test-driving a vehicle from your lot when they’re involved in an accident. The customer suffers injuries requiring medical treatment.

How garage liability helps: Your policy covers third-party bodily injury and property damage up to the $25,000 CSL minimum (or higher limits you select). PIP provides the required $10,000 personal injury protection.

Without coverage: You would be personally liable for medical bills, legal fees, and potential lawsuit damages.

Real-world example: Lot damage

Scenario: A severe storm damages several vehicles on your lot, or a theft occurs overnight.

How dealer’s open lot coverage helps: Garage liability only covers third-party claims — it doesn’t protect your inventory. You need dealer’s open lot coverage for physical damage to vehicles you own:

• Weather damage (hail, wind, flooding)
• Theft or vandalism
• Fire damage
• Collision damage on your lot

Need open lot coverage? ISBA can help you find the right policy to protect your inventory. Get a Quote

What garage liability insurance covers

Your garage liability policy protects your dealership from:

1. Test drive accidents - Coverage when customers or employees are driving dealership vehicles
2. Lot operations - Slip and fall accidents, property damage on your premises
3. Service department liability - Injury or damage during vehicle repairs or maintenance
4. Completed operations - Claims arising after you complete work on a vehicle
5. Employee driving - Coverage when employees drive dealership vehicles

What’s NOT covered by basic garage liability

Standard garage liability doesn’t cover:

• Damage to vehicles in your inventory (need dealer’s open lot coverage)
• Physical damage to customer vehicles in your care (need garagekeepers coverage)
• Employee injuries (need workers’ compensation)
• Professional errors or omissions
• Cyber liability or data breaches

How much does garage liability insurance cost?

Premium costs vary based on:

• Number of vehicles in inventory
• Annual sales volume
• Location and facilities
• Claims history
• Coverage limits selected

Most Florida dealers pay between $2,000 and $10,000 annually for garage liability insurance, depending on these factors.

Getting the right coverage for your dealership

While Florida sets minimum requirements (CSL $25,000 + PIP $10,000), we often recommend higher limits such as $100,000/$300,000 bodily injury and $50,000 property damage, or a liability umbrella for additional protection.

Let ISBA find you the best coverage

We shop multiple carriers to find competitive rates on garage liability insurance that meets Florida’s requirements and protects your business. Our team understands dealer operations and can customize coverage for your specific needs.

Florida insurance basics that still apply to dealers

• Every vehicle with a Florida registration must carry $10,000 PIP + $10,000 PDL from a Florida-licensed carrier or a self-insurance certificate.
• Coverage must stay continuous; surrender the plate before canceling insurance to avoid suspension.
• Penalties for lapses: possible suspension of license/plate for up to 3 years and reinstatement fees up to $500.
• Taxis require higher BIL minimums ($125k/$250k/$50k PDL); dealers handling taxis should confirm policies meet those limits.
• New to Florida? Obtain a Florida policy (or transfer with your agent) and register within 10 days when employment or school enrollment triggers residency.

Related resources

• Dealer bond basics: /isba/resources/florida-dealer-bond-requirements
• What is a dealer bond?: /isba/resources/what-is-motor-vehicle-dealer-bond
• What is garage liability?: /isba/resources/what-is-garage-liability-policy

Quick FAQ

• What are the minimum garage liability limits in Florida? $25,000 combined single limit for liability, plus $10,000 PIP.
• Does garage liability cover my inventory? No. Use dealer’s open lot coverage for your inventory. For customer vehicles in your care, you need garagekeepers coverage.
• Is PIP required for dealers? Dealer policies include PIP when required by statute; confirm with your carrier.
• Do I need higher limits than the minimum? Many dealers choose higher split limits (e.g., $100k/$300k/$50k) or an umbrella for added protection and lender requirements.
• What happens if coverage lapses? FLHSMV can suspend your license/plate up to 3 years and charge reinstatement fees; always surrender plates before canceling.

References

[1] https://www.flhsmv.gov/insurance/ [2] https://www.flhsmv.gov/motor-vehicles-tags-titles/dealers-installers-manufacturers-distributors-importers/mv-rv-mh-dealer-broker-licenses/mv-rv-mh-dealers-faqs/

Last reviewed: February 4, 2026.