Do you know what every car dealership owner’s biggest fear is? Storms. Windstorms, rainstorms, and those random bursts of hail that pop up when you least expect them can damage the vehicles in your inventory, especially the ones that are left outside on the lot. While dealer open lot insurance is designed for this very purpose, repairing physical damage to your inventory, there are many other factors involved, like policy limits, deductibles, and other security requirements.
Thankfully, there are many things that you can do to ensure that you don’t have to pay out of pocket for inventory losses and damages. Here’s what you need to know.
Coverage Basics Dealers Should Understand
In order to protect your inventory, your dealership needs to have the right insurance policies, as well as understand what they entail. Here’s a quick breakdown of some important terms:
- Dealer Open Lot – This insurance policy covers the vehicles that are left out in the open, helping pay for hail damage and similar things.
- Inventory Limit Strategy – There are two methods here, blanket and scheduled, both designed to help keep your outdoor inventory amounts low during stormy seasons. The type of policy that you have, blanket versus scheduled coverage, can help you make that decision.
- Deductibles – This is the amount of money that you’ll need to pay out of pocket when you make a claim. The number is usually a percentage, although a flat rate is also possible. Some policies have a deductible per car or per event. It depends on the type of coverage.
- Claim Documentation – This term refers to the things that you’ll need when you file a storm damage claim. They include VIN lists, photos, purchase docs, and valuation.
Hail Risk: The Most Common “One Storm, Massive Claim”
Hail can seriously damage the inventory sitting on your lot. In order to mitigate your risks and prevent your dealership from having to file a huge claim after the storm, you need to have a plan in place. First, you need to know exactly what your deductible is for hail and windstorm damage. You might have a deductible set up per vehicle or per event.
You can then use this information to set up a strategy should the weather turn bad. When there’s hail in the forecast, your employees can jump into action following your “hail plan.” This usually entails moving high-value vehicles indoors, moving as many vehicles as possible into covered storage, and taking other protective measures.
Once the storm has passed, you can enact your post-storm triage plan, which involves documentation, moving damaged vehicles to another part of the lot after photographing them, and determining which vehicles are considered to be a total loss, based on the extent of the damage, your deductible, and how much the car is worth.
Have Questions? Contact Charlotte Insurance
Want to learn more about insurance coverage for your dealership? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.