Automobile dealership owners have a number of things to worry about. After all, their inventory is expensive, on wheels, and left out in the open a majority of the time. This is why there are so many different types of insurance available for dealerships, ranging from standard commercial property policies to those that cover the garage, employees, and even the cars on the lot, like open lot insurance.
That last option, open lot insurance, while useful for situations where severe weather damages the vehicles in your inventory, tends to have limits and deductibles. Because of them, your insurance policy may not cover all of the costs should something happen to your inventory. You can do something about it though – set up your insurance limits for max coverage during those peak inventory months.
What Are Open Lot Limits?
Dealer’s Open Lot insurance covers all of the vehicles in a dealership’s inventory. Should they be damaged by wind, hail, or rain, your insurance should pay for some of the costs of repairs. However, there are some limits on these insurance plans. These include:
- Individual Car Limits – Each vehicle on your lot may have between $25,000 and $50,000 in coverage, based on the type of car and its overall value. The problem? If you have more damage to the vehicle than coverage, you may have to sell the car at a loss or pay out of pocket for repairs.
- Lot Limits – Not only are there insurance limits on the vehicles, but there’s a limit to the amount of coverage provided as a whole. This may range from one to five million dollars, and the individual car limits are a part of that number.
- Deductibles – Your deductible is the amount that your dealership will have to pay out of pocket before insurance kicks in. For dealerships, this is often a percentage of the claim amount, like five or ten percent.
Determining Your Busy Seasons and Watching the Weather
Now that you know what open lot limits are, the next step lies in determining your busy season. If you plan everything just right, you’ll be able to have the maximum amount of insurance coverage through your dealer’s open lot policy when your car lot has the most inventory. The weather plays a part in this as well, since you want to make sure that you maximize your coverage during hurricane seasons. The rest of the year you can drop down to the minimums, thus saving your dealership money on its insurance premiums. Switching your plans like this is normal, as long as you keep in mind the fact that every vehicle on your lot needs to be insured at all times, or you could face coinsurance penalties.
Have Questions? Contact Charlotte Insurance
Want to learn more about open lot insurance limits and related deductibles for your auto dealership? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.