E&O Coverage for auto dealerships is essential to understand, especially regarding the policies they carry and what they need to protect themselves. Your clients have to know what is the best insurance package to carry, especially when needing to defend against significant liabilities. Most in the industry understand what E&O Coverage does for specific retailers. However, there is a specific set of circumstances relating to auto dealerships.
E&O Coverage for Auto Dealerships
So, what are the differences, and how do they impact how your client runs their business? There are a few things that E&O focuses on. We are here to cover the bases.
Truth in Lending
Truth in Lending helps cover specific damages due to an error or omission. The government created the Truth and Lending Act in 1968 to protect people from inaccurate and potentially unfair billing and credit card practices. Likewise, it also ensures that annual interest rates and loan terms remain factual and accurate on the documents. It also relates to the coverage associated with E&O. Let’s say your client has helped service a car buyer. Then, they committed an error that resulted in a breach of the Truth and Lending Act. This coverage can help protect your client from a potential lawsuit.
Truth in Leasing
Truth in Leasing is another part of the coverage that helps protect auto dealerships. It emanates from the Truth and Leasing Act, a senate bill lawmakers established in 1976. What this act does is clearly identify anyone that becomes involved in a leasing transaction. Furthermore, it provides a clear idea of the duration of the lease and the equipment that the leaser will use. These are all written in a specified document to ensure everyone agrees to the same contract. Likewise, it also provides precise details on who is at fault for violations. Truth and Leasing is part of the E&O Coverage as it once again protects the auto dealership in the case of an error in the agreement.
Odometer Disclosure
Odometer statute coverage is included in E&O. Ultimately, this helps protect the potential buyer in the event of a failure to disclose the actual odometer mileage. It is a requirement of the Motor Vehicle Information and Cost Savings Act, which states that there must be proper disclosure of mileage before selling a vehicle to a consumer. Naturally, mistakes happen. A dealership could place the wrong information in the document. Moreover, they could leave out a 0 while writing a report hastily. This policy helps prevent auto dealerships from facing significant liability.
Title Errors & Omissions
Title errors happen. Therefore, it is also in the E&O Coverage for auto dealerships. It could be a scenario where a dealer mistakenly writes the wrong year or title information. Ultimately, a consumer buying a 2007 Nissan Pathfinder expects that to be on the title instead of a 2009 Nissan Rogue. It could cause more issues, especially if the vehicle is in an accident.
Prior Damage Disclosure
Many cars on the market have endured accidents. Thus, it is critical to always list if the vehicle has endured one. It usually involves a damage disclosure document that the seller must provide to the buyer before a transaction. It is also part of the E&O policy that auto dealers use to protect themselves from legalities if they fail to disclose a prior accident.
Conclusions
E&O Coverage can help any auto dealership overcome the worst liabilities. Finding the best insurance coverage for your clients is critical. Therefore, partner with an insurance company that can help you achieve your goals.
About K2 Insurance Services
K2Insurance Services strives to create a leading underwriting and distribution franchise in the program insurance market. We’ve bridged the gap between agents and client payments with our efficient ACH payment system. Partnering with us gives agents the advantage of ACH payment capability that allows for direct billing through the firm. Call us today at (866) 429-1638 to find out how you could partner with K2 so you could offer top-tier insurance coverages and modern features to your clients.
