If you’re a Kentucky dealer coming out of year-end reviews, you don’t need another checklist. You need a Kentucky used car dealer insurance plan that you can actually execute in Q1. That’s what this 90-day game plan is built to do.
Quick note: If you missed it, go back and read our Year-End Insurance Checklist first. Then come right back here and use this as your “what to do next” guide.
I’m Adam Sheridan with Reed Brothers Insurance. We’re a Kentucky-based independent agency that focuses specifically on independent used car dealers.
And because we live in this world every day, I’m going to keep this simple:
Your Q1 goal is to make sure your coverage matches your real operation today — not last year’s version of your dealership.
The One Kentucky Rule That Shapes Your Kentucky Used Car Dealer Insurance Plan
Let’s start with licensing compliance, because it’s the fastest way to get sideways.
In Kentucky, the Motor Vehicle Commission requires garage liability and specific minimum limits for most dealers: $250,000 per person / $500,000 per occurrence / $250,000 property damage. In reality, you’re most likely going to see this on an insurance policy as a combined single limit coverage of at least $750,000 per occurrence, but that’s the bare minimum. Don’t do the bare minimum.
This is the compliance foundation of your Kentucky used car dealer insurance plan.
One detail dealers and agents miss all the time:
- The certificate HAS to match the exact legal name you’re licensed under.
Also, depending on license type, requirements can change (example: restricted/mobility dealers may have a higher liability requirement).
Now let’s turn that into a 90-day plan.
Your 90-Day Q1 Risk Game Plan (Kentucky Used Car Dealers)
Here’s the Kentucky used car dealer insurance plan I’d run for the next 90 days if I were in your shoes.
Days 1–15: Kentucky Used Car Dealer Insurance Plan—License + Paperwork
This is boring stuff.
It’s also the stuff that causes the biggest headaches when it’s wrong.
Action steps:
- Confirm your Named Insured is correct
- Exact entity name.
- Correct address.
- Correct license type.
- Confirm your garage liability is actually filed correctly
- Proper certificate format.
- Submitted the right way
- Check your bond situation
- In Kentucky, the Commission may require a bond (and it can be triggered by your financials)
- The Commission’s own guidance says bond/financial arrangements can be required up to $100,000 in some cases.
- Practical takeaway: don’t assume your bond requirement is “always the same.” It’s case-by-case.
- Update additional insureds
- Landlords.
- Floorplan lenders.
- Auction requirements.
- Anyone who requires proof of coverage to do business with you.
Real-world example:
I’ve seen dealers “have insurance,” but the certificate was in the wrong entity name. That turns into a scramble when renewal hits or when the Commission asks for updated paperwork. Fix it now, while nothing is on fire.
Days 16–30: Kentucky Used Car Dealer Insurance Plan—Inventory + Open Lot
Most dealership pain comes from cars:
- hail
- theft
- vandalism
- water
- repossessions
- “We thought it was covered.”
This is where Dealer Blanket / Open Lot details matter. Inventory is usually the biggest dollar risk inside a Kentucky used car dealer insurance plan.
Action steps:
- Confirm your lot limit matches your real inventory
- If you grew, your limit needs to grow.
- If you downsized, you might be overpaying.
- Check how the policy is written
- Is it full comp? Fire/theft only? Specified perils?
- Don’t guess. Read it.
- Stress test your wind/hail deductible
Ask one simple question:“If a hailstorm hits 40 cars, what check am I writing?”Some policies cap your out-of-pocket with an aggregate. Some don’t. Some policies stop the bleeding. Some don’t. - Make sure False Pretense is addressed
- Test drive never returned.
- Bought a vehicle and title wasn’t legitimate.
- Those claims don’t behave like simple theft.
The hard truth:
A cheaper open lot policy isn’t “saving money” if it turns one hailstorm into a business-ending check.
Days 31–60: Match coverage to your actual operations (not what you think you do)
This is where dealerships quietly drift.
You start doing small things…and your insurance never gets updated.
Ask yourself:
- Do you offer any service work?
- Do you have a detail bay?
- Do you keep customer vehicles overnight?
- Do you send employees on errands in dealership vehicles?
- Do you let family members drive demos?
Those answers change what you need.
Two big examples:
1) Garage Liability vs. “Who fixes what?”
Garage liability helps when your operation causes damage to others.
Example: an employee causes a wreck while driving a demo. Liability can pay for the other party’s damages, but it doesn’t automatically fix your unit.
2) Customer vehicles = Garagekeepers conversation
If you handle customer vehicles, garagekeepers is usually the coverage that deals with damage to customer autos in your care.
If you don’t do service at all, great. But be honest about what’s happening day-to-day. Read that again. We, as insurance agents, can’t fix what we don’t know.
Days 61–90: Tighten the “people and process” risks that create claims
This is where you prevent the claim before it happens.
And it’s also where you can often improve pricing without cutting coverage.
Action steps:
- Clean up your driver list
- Who is allowed to drive?
- Who has dealer plates access?
- Who takes cars home?
- Run MVRs and set rules
- Require written permission.
- Demo agreements.
- Test drive procedures.
- Fix your keys
- Key box.
- Key log.
- End-of-day count.
- Spare keys secured offsite.
- Lot security basics
- Lighting.
- Cameras that actually record.
- Fencing where it makes sense.
- Visible signage.
- Build a “claim-ready” folder
When something happens, you want:- policy numbers
- carrier claim reporting info
- lender contacts
- inventory lists
- photos
- Demo, test drive and/or loaner agreements
- your internal incident notes
Real-world example:
After a storm claim, the dealers who win are the ones who already had clean inventory records and photos. The dealers who struggle are the ones trying to reconstruct everything after the fact.
What’s Covered vs. Not Covered (Simple version)
Every policy is different, but here’s the clean mental model I want you using:
Usually covered (with the right coverage in place)
- Injury or property damage you’re legally liable for (garage liability)
- Physical damage to your inventory (dealer blanket/open lot)
- Certain fraud/trick situations (false pretense, if included)
Often not covered (or needs a different part of the policy)
- Damage to your own unit under a liability claim (that’s usually inventory coverage territory)
- Customer auto damage (usually a garagekeepers conversation)
- Stuff you never told your agent you started doing (new operations = new gaps)
Why this 90-day plan matters
Because Q1 is when problems show up:
- You renew.
- You change lenders.
- You add drivers.
- You buy more cars.
- Weather hits.
- A customer files a complaint.
- Somebody wrecks a demo.
If your insurance program isn’t aligned, you don’t just risk money.
You risk your dealership’s reputation and your ability to keep operating.
Next steps (if you want help executing this)
If you want, I’ll help you turn this into a clean Q1 plan for your dealership:
- confirm your Kentucky compliance items
- review your open lot limits and deductibles
- tighten your driver exposure
- make sure lender/landlord certificates are correct
If you want help building a tighter Kentucky used car dealer insurance plan, I’ll walk through it with you and point out the gaps.
Visit our landing page and complete the quote application. That’s the fastest way to get the process moving.
And if you’d rather talk first, email me at . You can also check out more videos from our Auto Dealer series on our YouTube.
We look forward to working with you.
Disclaimer: This article provides general information for independent auto dealers and isn’t legal or insurance advice. Coverage availability, limits, and eligibility vary by insurer and are subject to underwriting. Your policy’s declarations, forms, and endorsements control. Regulations change; verify state requirements and consult your licensed agent about your specific operations and contracts.
