Commercial Auto Insurance Built for Used Car Dealers
Driving inventory off the lot, sending employees to the auction, shuttling a customer's trade-in across town — none of that is covered by a standard personal auto policy, and most general commercial auto policies weren't written with a car lot in mind. We structure commercial auto coverage specifically for used car dealers, so every vehicle your operation touches has the right protection behind it.
What Dealer Commercial Auto Actually Covers — and What It Doesn't
Commercial auto insurance for dealers covers vehicles your business owns and operates — dealer-plated cars, trucks, and vans driven by you, your employees, or anyone acting on behalf of the lot. If an employee is heading to the auction, picking up a trade-in, or driving a dealer-tagged vehicle on business, commercial auto is what responds to a collision or liability claim.
What it does not cover is third-party liability during test drives or lot operations — that's the territory of your garage liability policy. And if a customer brings their car in for service and your employee drives it, that falls under garagekeepers coverage, not commercial auto. These are three distinct coverages with three distinct jobs, and understanding where each one starts and stops is exactly the kind of detail that determines whether a claim gets paid.
The Furnished Auto Endorsement: When You Drive Your Own Inventory
Dealers who drive inventory vehicles for personal use — commuting, errands, daily driving off the clock — need more than a standard commercial auto policy. The furnished auto endorsement is specifically designed for this situation. It extends coverage to vehicles from your lot that you or a designated driver use on a regular basis, closing the gap that exists when a dealer-owned vehicle is used outside of a clear business context.
This is a real coverage question that comes up often, and it's one that a non-specialist agent may not think to ask about. We include it in the conversation when we're structuring a dealer package because finding out your personal use wasn't covered is the kind of discovery that happens at the worst possible time.
Drive-Away Coverage for Dealers Who Move Vehicles Between Locations
If your operation involves transporting vehicles — from auction to lot, between locations, or for delivery — drive-away coverage is the piece that protects those vehicles while they're in transit under their own power. Standard commercial auto policies may not automatically extend to vehicles being driven on a one-time or temporary basis by a driver other than a regular employee.
We review how your lot actually moves vehicles and make sure your policy language reflects your real workflow. Dealers who buy at auction regularly or operate across multiple locations in the Jefferson Parish area have specific exposure here, and we structure coverage to match it.
All Four Pieces of a Dealer Insurance Package, Coordinated by One Agent
Commercial auto is one component of a complete dealer insurance program. The other three — garage liability, floor plan and open lot coverage, and your auto dealer surety bond — each cover a different part of your operation. When all four are placed through the same agent, there are no gaps between policies and no finger-pointing between carriers when a claim touches more than one area.
That's how we build dealer coverage at HGIA. We work with used car dealers across Jefferson Parish, Kenner, Metairie, and the surrounding metro, and we structure programs around how those lots actually operate — not around a generic commercial auto template pulled from a carrier filing.
- Garage liability for third-party bodily injury and property damage on your lot
- Floor plan and open lot coverage for your inventory
- Auto dealer surety bond required by the Louisiana DMV
- Commercial auto for dealer-owned vehicles driven by you and your employees
Frequently Asked Questions
Floor Plan and Open Lot Coverage — Common Questions
Do I need insurance before getting a dealer floor plan in Louisiana?
Yes. Floor plan lenders require proof of insurance — specifically, open lot coverage with the lender named as loss payee — before funds are released. You'll need the policy in place and a certificate of insurance issued before financing can move forward. We structure these policies to meet lender requirements and issue COIs directly, so there's no lag between binding and funding.
What does dealer open lot coverage in Louisiana actually cover?
Open lot coverage provides physical damage protection for your vehicle inventory — theft, vandalism, fire, hail, flooding, and weather events including named storms. Coverage terms and deductible structures vary by carrier and policy form, especially for named storm coverage. We walk through the specifics of each policy before binding so you know exactly how your coverage is structured.
What happens to my lot inventory during a hurricane if I'm on a floor plan?
That depends on how your open lot policy is written. Named storm coverage isn't automatic on every policy — some carriers include it in the base form, others offer it as a separate endorsement with its own deductible. For a Louisiana dealer, this is one of the more important coverage conversations to have before storm season. We review named storm provisions with every dealer we work with and make sure the policy is clear on this point.
Is there a difference between what my floor plan lender's insurance covers and what an open lot policy covers?
Yes, and it's worth understanding. Floor plan lender insurance is structured to cover the lender's financial interest in each vehicle — typically around 75% of wholesale value. A separate open lot policy in your name covers your full interest in the inventory, filling in the rest. Knowing how the two interact makes it much easier to evaluate whether your current coverage picture is complete.
Do I need both garage liability and open lot coverage?
Yes — they cover different things. Garage liability covers your liability exposures: test drive accidents, premises incidents, and dealership operations. Open lot coverage handles physical damage to your vehicle inventory. Most floor plan lenders require both, and they work together as a complete dealer insurance package.