Dealer open lot insurance for the inventory on your lot
Your inventory is often the largest asset on your balance sheet, and it sits outside. Dealer open lot coverage, also called dealers physical damage, protects vehicles you hold for sale against hail, theft, fire, flood and other perils. We build it around your inventory levels and your floor-plan lender's requirements.
New and used auto, RV, powersport, trailer and equipment dealers
Why a standard property policy is not enough
Commercial property policies typically exclude or tightly limit vehicles held for sale, especially outdoors. Dealer open lot coverage is built for that exposure.
One storm, many vehicles
A single hailstorm can damage most of a lot in minutes. Open lot programs are designed for that kind of concentration.
Theft targets
Catalytic converters, wheels and whole vehicles are targets on lots after hours.
Lender requirements
Floor-plan lenders usually require physical damage coverage on financed units and proof that it stays in force.
What dealer open lot coverage can include
Programs differ by carrier. These are the parts we review on every dealer program.
Comprehensive perils
Hail, wind, flood, fire, theft, vandalism and falling objects. Flood and hail may carry separate deductibles or sublimits.
Collision
Damage from collisions, including while employees move vehicles or customers test-drive them, when collision is included. Some dealers choose comprehensive only.
False pretense
Loss of a vehicle obtained through fraud, such as a bad check or a buyer using false identity. Often an endorsement with its own limit.
Off-site and overflow lots
Inventory kept at secondary lots, body shops or storage yards. Each location usually needs to be listed with a limit.
Transit
Units being delivered to your lot or to a customer, by your drivers or a transporter, subject to policy terms.
Shows and events
Vehicles displayed at auto shows, fairs and off-site sales events.
Reporting or non-reporting form
On a reporting form, you report inventory values each month or quarter and premium follows actual values. A non-reporting form uses a fixed limit that must cover your peak inventory.
Deductibles
Usually a per-unit deductible plus a maximum per occurrence, and sometimes separate hail or flood deductibles. The structure matters as much as the dollar amount.
Valuation
How a damaged or stolen unit is valued, often based on your cost rather than retail price. Review how the policy treats new, used and consigned units.
How open lot losses happen
Round, illustrative numbers to show how limits and deductibles interact.
Hail damages most of a used-car lot
A late-afternoon hailstorm damages 120 vehicles on a used-car lot. Each needs paintless dent repair or panel replacement, and several need new windshields.
- Average repair $5,000 x 120 units$600,000
- Per-unit deductible $1,000, capped at $25,000 per occurrence-$25,000
- Illustrative claim payment$575,000
Illustrative example. Real outcomes depend on the facts and your policy terms.
Gaps we look for in dealer programs
Limits below peak inventory
Non-reporting limits set in a slow month can leave you underinsured during a busy season. Reporting forms help, but only if reports are filed accurately and on time.
Unexplained inventory shortages
Vehicles missing with no evidence of theft, found only at an inventory count, are commonly excluded. Key control and regular counts matter.
Employee theft
Theft or fraud by your own employees is typically excluded from open lot coverage and belongs on a crime policy.
Mechanical breakdown and wear
Mechanical failure, wear and tear and damage from repairs are generally not covered.
Building a dealer open lot program
Review inventory and locations
Average and peak values, new versus used, high-value units, every lot and storage location, and how vehicles move between them.
Check lender requirements
We review your floor-plan agreement so limits, deductibles and lender loss-payee wording meet its terms.
Structure deductibles
We model per-unit and per-occurrence deductible options against a realistic hail or theft event.
Place and maintain
We compare dealer markets, issue lender certificates and keep reporting on schedule.
Dealer open lot FAQ
Is dealer open lot the same as garagekeepers?
Does open lot cover test drives?
What is a reporting form?
Are consigned vehicles covered?
Does open lot coverage include flood?
What helps with pricing?
Put your inventory on the right program
Share your inventory levels, locations and lender requirements, and we will compare dealer open lot options.
Coverage descriptions are general summaries for education. They are not legal, tax or coverage advice, a statement of coverage, an offer or a binder. Scenarios and dollar figures are illustrative examples, not representations about any business. Coverage, limits and eligibility are governed by the terms, conditions and exclusions of the policies issued, vary by carrier, and are subject to underwriting.