What happens if you get into an accident while driving around a Ferrari on your dealer plate? I assume it goes thru your dealership insurance? Do you have to disclose to your dealership insurance company that you have a lot full of Hondas but you just bought a Ferrari as inventory? I ask because I assume your insurance cost is based on your inventory value and so a Ferrari would be out of the norm?
If you're driving around any car on a dealer plate, it better be owned by your dealership. Which means it's on your dealership insurance. The only exception would be if a vehicle is under consignment. In Texas, dealer plates can be on a consignment vehicle, not sure about other states. As for insurance coverage; I guess it depends on how you structure your consignment agreement, but in my case, I do not carry insurance coverage for consignments, so I have a separate insurance agreement that states a consignment vehicle is covered by the owner's insurance, and I have their insurance on file. As for the second question: I can't speak for all insurance coverage, but I am covered for a specific total coverage amount. I am responsible for maintaining the appropriate level of coverage for my inventory. If there is a claim, many insurance companies will want a list of your current inventory, so they can compare to your coverage. If you have more inventory value than coverage, then they will reduce your claim by the % that you are underinsured on your total inventory.