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Dealer Open Lot Insurance Alternatives For Outdoor Vehicle Storage

Managing outdoor vehicle storage facilities presents unique operational, business, and insurance challenges for businesses. Open lots expose parked vehicles to the elements with no protection to protect them from weather, wildlife, or criminal activities. Secure covered storage can help businesses protect and mitigate risks but requires specialized insurance solutions.

This report seeks industry first to evaluate alternatives to conventional and dealer insurance for open lot storage insurance by exploring one such insurance option – customized collision coverage policies designed for enclosed vehicle compounds. With rising storm frequencies and repair costs, operators need insurance coverage tailored to the protective measures of enclosed parking. Concurrently, vehicle owners demand security and liability coverage that dealer insurance cannot afford for open lot storage.

The following sections will outline critical issues with the dealerships’ open lots and insurance, the advantages of enclosed facilities, and how customized policies can specifically address risks while reducing long-term costs. Performance data, case studies, and customer experiences will demonstrate lower loss ratios compared to other dealerships’ open lot storage. The program aims to understand how enclosed compounds paired with the right insurance policy can deliver peace of mind to business owners and profitable protection for operators’ businesses.

Why Choose Open Lot Insurance For Auto Dealer Insurance

Open lot storage provides an essential and affordable solution for vehicle parking or temporary storage needs. Standard empty dealer open lot insurance policies are widely available and offer relatively low premium costs. With no walls or barriers enclosing the space, overhead is minimized for property owners and insurers. Upfront expenses are lower to establish and operate these bare-bones facilities. Flexible access also allows owners to test drive vehicles on and off the dealer open lot as frequently as needed.

The open perils structure of the policies maintains lower rates by not specifying covered causes of loss. Empty lots remove upfront storage fees or lease obligations for those seeking low-cost parking. The simple insurance application process and annual renewals are also convenient. However, some claim this low-cost insurance approach provides limited ongoing protections against theft. Open lot insurance appeals to fleets and other business owners seeking the cost of temporary parking.

With vehicles in and out regularly, policies for empty lots provide flexible month-to-month coverage options without long-term commitments. For used cars, dealerships, and repair shops, many dealers open and accommodate inventory overflow or customers dropping off vehicles. Minimal startup expenses and operational oversight are kept monthly, and dealership rentals are affordable. While essential in scope, empty dealers’ open lot policies facilitate short-term, transient vehicle parking coverage needs for many businesses and individuals.

Why Not To Choose Open Lot Insurance for Auto Dealers

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While initially appealing for cost savings, dealer open lot insurance is inadequate in multiple ways. Exposure to weather, wildlife intrusion, theft, and trespassing leads to higher claim frequencies over time as risks remain unmitigated. These losses drive premium increases annually as insurers account for the lack of protective controls. Coverage becomes more restrictive with broader exclusions implemented to constrain ever-growing liability. Maximum storage durations are generally short-term, preventing accurate long-term parking.

Dealer Open lot perils policies do not consider issues like leaks from rain or animal damage as covered causes. Liability protection is narrowly focused on the property owner, ignoring potential vehicle risks. With climate change effects intensifying storms nationally, dealers’ open lots will become riskier propositions without enclosing structures. Comprehensive protection cannot be reliably or cost-effectively provided through traditional dealer available or open lot insurance alternatives. Reasons Against Open Lot Insurance.

Over the long run, dealer open lot insurance proves inadequate for protecting vehicles from inevitable risks. Gaps emerge as stored autos confront worsening threats from climate change, like more significant storm events. Left unaddressed, these issues escalate repair costs that cannot be recouped from policies with restrictive coverages. Without addressing the root causes of losses, premiums continue rising disproportionately to payouts. Actual long-term storage demand exceeds maximum duration limits as well. Comprehensive risk management is better served through facilities employing physical and policy defenses tailored to enclosed vehicle compounds.

Benefits of Enclosed Compound Storage

Enclosing vehicles within fenced and gated compounds mitigates risks faced in open lots. Walls and roofing provide complete protection from weather influences that cause the majority of deterioration over time. This protects investments and reduces claims. Physically secure facilities lower shrinkage from theft and vandalism versus loosely controlled outdoor areas. In addition to safeguarding vehicles and lowering insurance costs, enclosed storage generates further revenue potential.

Compounds can lease vacated spaces to increase the utilization of land and structures. Rented spaces subsidize long-term parking expenses for storage customers. On-site management offers convenience compared to outdoors, including maintenance, cleaning, and security. Liability barriers contain risks within controlled boundaries. For carriers, these added protections lower loss ratios, making enclosed storage attractive for customized insurance programs tailored to specific risks and controls in place.

Enclosure Specifications Critical to Risk Management

The type and quality of enclosure structures directly impact insurable risks and associated premium costs. Insurers require facilities to meet minimum construction standards to qualify for tailored stored auto policies. Enclosing vehicles within fenced and gated compounds mitigates risks faced in open lots. Walls and roofing provide complete protection from weather influences that cause the majority of deterioration over time.

This protects investments and reduces claims. Physically secure facilities lower shrinkage from theft and vandalism versus loosely controlled outdoor areas. In addition to safeguarding vehicles and lowering insurance costs, enclosed storage generates further revenue potential. Compounds can lease vacated spaces to increase the utilization of land and structures. Rented spaces subsidize long-term parking expenses for storage customers.

On-Site Management

On-site management offers convenience compared to outdoors, including maintenance, cleaning and security. Liability barriers contain risks within controlled boundaries. For carriers, these added protections lower loss ratios, making enclosed storage attractive for customized insurance programs tailored to specific risks and controls in place. Insurers often mandate that fenced perimeters be 10 feet tall and constructed of solid materials like customized wrought iron or coated chain link.

Electronically controlled gates with automated locking systems after hours better contain risks versus manually operated versions. Adequate lighting is another important consideration, as bright, uniform illumination within 100–200-foot candles mitigates crimes of opportunity that drive losses. Video surveillance coverage of all areas furthers deterrence. By objectively evaluating physical damage and validating risk mitigation measures in place through on-site inspections, insurers can customize policies with lower rates reflective of the actual cash value of reduced costs of protecting enclosed auto compounds from physical damage versus open lots.

Insurance Options for Enclosed Compounds

Insurers offer dealers several tailored policy and program structures to protect the various dealerships that address enclosed vehicle storage compounds’ unique risks and protective features. By accounting for the site hardening measures that dealerships have in place to protect themselves, these programs can provide comprehensive coverage at lower costs versus traditional open lot coverage policies.

Property Insurance Options

Property policies designed around enclosed vehicle storage facilities improve empty dealer open lots and their physical damage coverage and property damage coverage in several ways. Firstly, enclosed facilities allow insurers to adopt a specified cause of loss structure rather than an all-dealer empty dealer open lot perils approach. Since the compound’s walls and roof mitigate threats like weather, policies can determine perils like fire, lightning, theft, and malicious mischief. This targeted scope directly ties only the physical damage coverage and property damage of coverage to insurable risks, excluding others like wear and tear.

Policy coverage and claim rates are also adapted to reflect individual construction qualities. Materials, thickness of walls/roofing, drainage systems, and impact resistance are all underwriting factors. Facilities constructed to withstand extreme weather receive preferred insurance coverage and claim rates. Property limits can also be customized, such as seasonal increases during hail and windstorm seasons, to protect and fully restore vehicles after covered events.

Optional endorsements are particularly valuable for enclosed storage and property damage policies. Replacement cost coverage ensures like-kind upgrades for total losses, whereas open lot policies may limit the actual cash value. Extended non-owned auto coverage inside the facility protects vehicle values beyond the strict property damage insurance policy. Deductibles are flexible based on the compound’s capabilities, such as lower wind/hail deductibles for storm-resistant constructions.

Liability Insurance Options

Where open lot policies provide full collision coverage but only narrow on-site general liability and no property damage and physical damage coverage protection, enclosed storage facilities require comprehensive collision coverage and robust, broad general liability for theft and other loss runs and physical damage coverage, tailored to protect their unique exposures. Due to secure access controls at enclosed sites, comprehensive policies can safely extend general liability for bodily injury, property loss runs, and physical damage coverage but only to stored vehicles, facility operations, and employees.

Standard general liability limits of $1 million per occurrence/$2 million aggregate may not suffice, considering hundreds of high-value vehicles present. Enclosed storage and public and commercial property general liability policies thus commonly offer higher optional general liability limits of up to $5 million to fully protect most insurance companies’ auto dealers, employees of most insurance companies’ auto dealerships, the dealership compound, and dealership customers from even significant claims.

Driver and Employee Coverage

Significantly, for other auto dealers, liability coverage extends to drivers and employees moving vehicles around enclosed car dealership dealer sites. For non-owned auto dealers, endorsements cover safeguard operators and employees transporting autos for another car dealer. A customer’s vehicle dealership, a check-in test drive in/out, maintenance, carwashes, and transport to repair shops – activities not feasible at open lots.

Underwriting evaluates business security features like guaranteed, licensed employees, keycard access records, video surveillance of all business activity, and mandatory monthly reporting of incident reports to the insurance industry to determine rates. When occupied by businesses, fenced perimeters, guarded entry gates, and on-site management, 24/7 receive the insurance industry the highest preferred tier rates.

Medical Claims

Extension of medical claim payout payment coverage supplies goodwill payout by a third company full payout insurance and inventory coverage payout from an insurance company offering payment payout for injuries regardless of claim and liability up to policy limits. Umbrella/excess liability policies may also be purchased as affordable options to increase the overall cost of site protection by millions of dollars.

Enclosed storage facilities access expanded protection through these specialized liability structures, balancing their unique operations and general liability profile – a critical advantage over open lot alternatives.

Non-Owned Auto Coverage

A critical coverage distinction between dealer open lot coverage and other dealer open lot and enclosed storage policies is non-owned auto insurance coverage. This type of protection program for auto and dealerships generally covers but does not apply to auto dealerships’ empty lots and yards since vehicles in dealers’ open lots are not operated on-site. However, dealers’ open lots and dealership-enclosed compounds often require limited inventory coverage to move stored vehicles within dealers’ open lot lots or facility boundaries.

Non-owned auto dealer insurance endorsements protect the dealership compound auto dealer insurance and only cover the dealership itself, and employees shuttle autos between the dealership and the insurance company itself for critical dealership business functions like maintenance, washes, and transfers to repair shops. Individuals authorized by the dealership or insurance to transport vehicles between the dealership and the dealership or insurance company for the dealership business are issued coverage up to specific policy liability limits.

Employee Driver Qualification

Underwriting assesses employee driver qualification protocols like mandatory background checks, minimum licensing periods, and safety training requirements. Video footage of lot areas substantiates documented transports for verifiable reasons.

Higher than industry standard business non-owned car policy general liability claim coverage sometimes exceeding $5 million recognizes general liability claim coverage for large numbers of high-value business vehicles owned on enclosed business premises. Physical damage claim coverage covers auto interiors and cosmetic repairs and provides goodwill if accidents occur during the sanctioned movement and service of business vehicles owned on commercial property.

Non-owned auto coverage extensions to standard enclosed storage insurance policies deliver a complete operations risk management insurance coverage solution that is impossible for open outdoor storage. Customizable non-owned coverage amounts, insurance policy coverage, limits, and terms streamline the protection of all facility activities.

Underwriting Assessment of Enclosure Specifications

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A comprehensive underwriting assessment of commercial property is critical to properly evaluate risks and determine competitive premium rates for enclosed storage facilities and commercial property. Insurers will conduct a comprehensive site visit to assess key protection elements of commercial property.

Claims Considerations with Your Insurance Company

Handling claims for high-value vehicles stored within enclosed storage facilities requires a tailored approach compared to open lots. Since fewer unprecedented losses occur, the adjusters who work with these facilities become familiar with each location’s unique construction details, sophisticated security systems, and stringent emergency procedures. This localized expertise helps assess special situations properly when claims do arise. Clear electronic records showing vehicle locations cross-referenced with policies and video evidence of documented vehicle movements also aid the claims process by helping determine fault and liability more quickly.

Facility Layouts

Speed is also essential, given that expensive vehicles are at risk, so enclosure personnel are trained to immediately secure areas to protect property until qualified adjusters can quickly arrive with assistance from on-site emergency power if needed. Well-organized facility layouts further streamline the settlement process by allowing staff to pinpoint damages for estimates precisely. The transparent, tailored insurance policies in place for these facilities also help to avoid disputes and keep long-term client relationships satisfied and supportive of future business for years to come.

Enclosed Vehicle Storage Policy

Enclosed vehicle storage compounds provide opportunities for customized insurance programs tailored to their specific risks and loss prevention capabilities. Property policies can implement specified cause structures, material-based ratings, and seasonal adjustments that capture facilities’ constant protections. Liability coverage similarly adapts by extending protection to autos and site operations. Higher auto dealer insurance, generalized liability limits, and endorsements for non-owned auto dealers facilitate smooth auto dealer insurance and dealership operations.

Thorough underwriting assessments substantiate rates through documentation of enclosure specifications and security features. Dedicated claims handlers and a dedicated team further streamline the process. Ultimately, most insurance companies and insurers recognize that enclosed facilities achieve dramatically lower loss ratios than open lots through deliberate hardened construction. Risk management performance translates to endorsement discounts, lower rates, inventory coverage, and abundant capacity from competitive carriers.

Mitigate Exposure to Natural Disasters

The specialized structures available set the insurance company, business, and industry of enclosed storage apart by delivering an optimized, comprehensive, and affordable protection program that perfectly balances firms’ employees’ and facilities’ demonstrated strengths in mitigating exposures to natural disasters. This sustainable advantage drives bottom-line business growth for operators and aligns interests between storage businesses and their insurers.

Property construction standards, such as wall and roofing materials, are analyzed. Factors like wind load certifications, durable metal siding, and adequately sealed weatherproof joints impact insurability coverage and rates. Similarly, electronic security systems are inspected. Underwriters examine camera coverage, recording functions, and whether feeds are actively monitored. Access control is a significant consideration. Features like professionally monitored intrusion alarms, automated locked gates, and unique driver’s authentication provide substantial mitigation. Video evidence substantiates documented entries and exits.

Other reviews include insurance company emergency operations protocols. Underwriters ensure insurance company and crisis response plans, staff training dealers, insurance company/licensing, and insurance company rapid notification processes are audited and verified as functional. Extinguishing equipment and emergency power backups are checked.

Final Thoughts

Data from comparable risks also informs underwriting decisions. Actuarial analyses of past losses at similarly designed and managed facilities help determine likely risk exposure before binding coverage.

By conducting thorough in-person company evaluations of dealers and reviewing objective industry operating cost data from dealers and the industry, insurers and dealers have concrete information to develop customized insurance and service programs accurately priced according to each company or dealership’s detailed business risks program, protective strengths program, service call program, call back program, business call program cost, and individual enclosed storage properties program. Competitive rates result.

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