Dealers Open Lot Insurance
Car dealerships have unique requirements and needs, so they often take customized insurance plans for the specific risks they experience. Dealer's open lot insurance offers coverage for physical damage, fleet coverage, or auto physical damage. This policy covers various types of vehicles, including private and public vehicles for sale.
What is covered?
Many used car dealerships do not have specific insurance coverage. Their vehicles may be exposed to different risks, including hurricanes and floods, which is why car dealerships take customized insurance plans. It is essential to work with your auto risk representative to ensure you have the coverage you need. Dealer's open lot insurance is distinct from other types of insurance plans, including business and property insurance. Some auto car dealerships prefer to add a garage liability and garage keepers to handle the gaps in insurance coverage. Every insurance company has its approach to business insurance for car dealerships, so you may need an expert to determine the best option for you.
Collision plans cover damages as a result of collision or accident. Depending on the policy, some plans may not cover vehicle damage as a result of an accident. Ensure you go through the policy to check what is covered.
In specific cases, coverage is offered to a car or equipment if it becomes damaged by an explosion, fire, lightning, windstorm, vandalism, earthquake, flood, or hail on the conveyance transporting the insured vehicles. Fire and theft offer coverage to a car and equipment caused by explosion, theft, or lightning. False pretense coverage is provided if someone pushes the dealer to voluntarily part with the vehicle through a scheme, trick, or pretense. It covers the dealer if they get a car from a seller with no explicit or legal proof of ownership. False pretense can involve a test drive where the prospective buyer drives the vehicle away without paying for it.
Importance of a good coinsurance
You may assume that having a certain amount of inventory insurance ensures that your carrier will pay in full during a claim that is less than the insured amount. Unfortunately, this is not how it goes in insurance for car dealers. Insurance firms expect dealers to insure the total percent of the value of the inventories. If you insure less, then they only pay a certain percentage of your claim. Take, for instance, your inventory value is $300,000, and you insure it for half, the insurance will pay half the percent of your claim. The most paid for any loss of one vehicle is less than the actual value of the lost or damaged car, the wholesale value of property, repair costs, and indicated limit.
You can get monthly reporting, whereby you send a monthly report to the carrier with the precise dollar value of vehicle inventory. If you fail to submit the reports on time, there are severe penalties. When you fail to send the first report, the carrier will only pay 75% of the claimed loss despite the limit on the declaration page. Monthly reporting is for inventories that have an insurance value of more than $1,000,000.
Don't hesitate to get in touch with TWFG Insurance at 713-388-6681 to receive a free quote today.