This is the final in a series of 3 posts on the Garage policy. The other posts are here and here.

Car dealers operate a unique type of business, and need a unique insurance coverage. It is called Dealers Open Lot, or DOL, covering vehicles held for sale by the dealer. These vehicles can be owned by the insured, a lender, or other owner placing the vehicles on contingency sale.

DOL is a bit of a hybrid between Business Personal Property, where we expect the property to be held in one place and with an expected degree of security, and Commercial Auto, where autos are driven on the road.

A limit applies for all of the vehicles which may be on the lot at one time. These vehicles may include private passenger types, trailers, heavy trucks, RVs, boats and ATVs (“toys”). PPT dealers are the most common, but this type of coverage is used for all vehicle dealers.

100% coinsurance applies to the limit for DOL, so it is important to identify the maximum values of the vehicles to be insured, unless reporting is used. For a limit over $1 million, reporting is typically required by the insured, either quarterly or monthly. This is similar to BPP inventory reporting.

The typical coverages available for DOL are Collision, and either Comprehensive or Specified Causes of Loss, also known as SCOL. False Pretense coverage can also be added. Typical claims for False Pretense are a test driver that never returns (steals the vehicle) or the dealer buys a vehicle from a seller that did not have legal title.

SCOL on a Garage policy differs significantly from SCOL on a Business Auto policy. See here for more on Specified Causes of Loss for Business Auto. The Garage type does not cover the perils of wind, hail, earthquake, flood, or destruction of the covered vehicle’s transport. It does insure against these perils:
Fire, lightning or explosion
Theft
Mischief or vandalism

For all DOL coverage, a deductible applies for each vehicle, with a maximum deductible for a single event. The maximum deductible is usually 3 to 5 times the individual deductible. For example, a fire damages 12 autos on the lot. The individual deductible is $500, but the maximum deductible of $2,500 would apply for damage from this fire.

As with any type of property, underwriters are concerned with the security protecting the vehicles. If vehicles are parked indoors round the clock, just at night, or never; fencing; lighting; cameras; etc. Underwriters will also be persuaded by geography (ie, weather), types of vehicles, and radius of operations.