Protect the vehicles you own for sale
Inventory coverage is different from liability coverage. Liability addresses covered damage or injuries to others. Dealers physical damage addresses covered loss to the vehicles themselves. The policy can include comprehensive, specified causes of loss and collision, depending on the coverage you select.
Tell us about your average inventory, your highest expected inventory value and the most expensive vehicle you might carry. Explain whether vehicles are owned outright, financed, consigned, stored elsewhere or in transit.
Look closely at weather and theft coverage
Ask specifically about hail, wind, flood, theft and vandalism. Do not rely on the phrase “full coverage.” Exclusions, catastrophe limits, location restrictions and deductibles can change how a large loss is handled.
If a storm damages several cars, the deductible may work differently from a single-vehicle collision deductible. Have the agent explain any per-vehicle deductible and any maximum that applies to one event. Make sure you can absorb that amount.
Keep your values and locations current
Some policies use scheduled values or limits; others require periodic inventory reporting. Follow the reporting instructions and deadlines. An outdated report or a limit below your actual exposure can affect recovery.
Ask how the insurer values a damaged or totaled unit. Retail asking price, purchase price and the policy’s settlement basis are not necessarily the same. Keep purchase records, repair invoices and an accurate inventory list. Tell the agent before adding an overflow lot.
Check financing and transportation
Your floor-plan lender’s written insurance requirements help define the limits, deductibles and loss-payee terms to check. If the lender provides or charges for inventory protection, review what it covers, where it applies and whose interests it protects before buying overlapping coverage.
Auction pickups, shipping, delivery, consignment and vehicles in another business’s care all deserve a separate question. Confirm when your coverage starts and stops during a transaction. Boat inventory and water demonstrations need a marine-specific review.