Garage keepers insurance falls under a garage policy held by auto dealers, body shops, and repair shops. It provides them with liability protection in the event that a customer's car is damaged while in the garage's possession for repairs, bodywork, or storage.
This type of liability insurance can be critical for smaller auto businesses as it can provide a safeguard against financial disaster. This type of coverage is ideal for:
- Towing companies
- Auto detailers
- Body shops
- Service stations
- Car washes
- Repair shops
What Type of Protection Does Garage Keepers Insurance Offer?
There are three types of protection that garage keepers insurance can provide to an auto business.
Legal Liability
One of the most expensive types of claims that this type of policy will protect against is legal liability. This type of coverage protects the garage owner against damages caused by the negligence of one of its employees. For example, if the car was damaged by the mechanic during repairs, this coverage would kick in.
Direct Primary
According to Insurance Journal, this coverage will protect your customer's property if it's damaged by extreme weather or is stolen. This coverage will kick in no matter who is at fault for the damage.
Direct Excess
This is similar to direct primary coverage as it goes into effect regardless of fault. Yet, instead of covering the full amount for the theft or damage, it will cover the excess amount that the owner's original policy does not cover.
How Much Does Garage Keepers Insurance Cost?
The cost of garage keepers insurance varies greatly between businesses, so to determine how much your policy will cost, you will have to get a quote. Some of the factors that can influence the price of your premium include:
- Business location
- Types of vehicles you provide service for
- How many vehicles you deal with in a day
- The coverage limits you choose
While the insurance company will consider the above factors before determining your premium amount, on average, most businesses will pay between $1000 to $1300 annually. Rates can run as low as $800 per year to as high as $2000 a year.
Additional Coverages With a Garage Keepers Policy
While several coverages provide protection in a standard garage liability policy, the garage keepers policy can provide coverage that the standard policy lacks. According to Trusted Choice, it provides protection for your customers' vehicles from damage caused by:
- Theft
- Fire
- Extreme weather
- Vandalism
- Accidental damage
Excluded Property Under Garage Keepers Insurance
CoverWallet explains that garage keepers insurance does cover the customers' vehicles while in your care, but it usually excludes property contained in the vehicle, such as:
- Factory stereo equipment
- CDs and DVDs
- Items in a trunk or glove compartment
- Phones, radios, or scanners that are not permanent
- Radar detectors
It also will not provide coverage for damage caused by poor or faulty workmanship, poor condition parts, or a lack of warranty.
Difference Between Garage Keepers and Garage Liability Insurance
Garage liability insurance is a standard policy carried by most repair shops, dealerships, and storage facilities to protect their business from liability for bodily injury or property damage if an accident occurs in the course of business operations. It acts as a combination of general liability and business auto insurance and will pay the costs for liability, medical, and repairs. Coverages under this type of policy include:
- Injuries to third parties
- Property damage caused by business equipment
- Products the shop manufacturers or sells that damage another person's vehicle
It is important to note that this type of policy only covers the claims filed by a third party and not the actual vehicle itself. For example, if someone were to slip and fall at the garage, the garage's liability insurance, not garage keepers insurance, would help pay for the legal defense and the customer's medical bills. Garage keepers insurance protects the vehicles under your care in the event of any type of accident, no matter who is at fault.
How to Avoid Filing a Service Claim
Even though garage liability insurance and garage keepers insurance will provide you with the coverage you need, there are ways to avoid claims. You can
- Have video surveillance to deter theft.
- Have a well-lit location to deter both vandalism and theft.
- Keep all of the vehicles stored indoors when no one is there and secure the perimeter with a fence.
- Have preventative equipment available such as smoke detectors, fire extinguishers, and a sprinkler system.
- Hire good help who have proven driving records.
Finding the Best Garage Keepers Policy Rates
As stated by Progressive Commercial Insurance, when calculating the price of your garage keepers insurance policy, insurers will look at:
- Your claim history
- Your annual revenue
- Your daily volume
- Your property amounts
- Your chosen deductible
All of this information will be factored in when determining your rates. Pay particular attention to limits and deductibles when comparing the quotes. Sometimes having a lower limit and higher deductible will give you the best premium rates while still providing you with the coverage you need.
You should also be wary of adding extensions like additional coverage for personal property inside vehicles. Doing so can significantly increase your premium price and may not be necessary to provide you with the right amount of coverage.
Finding the best insurance policies to cover your garage business is vital to lower your risk of a major financial issue. By combining garage liability insurance and garage keepers insurance, you can be sure you are covered no matter what happens. Always shop around to get the best price for insurance to pay less for premiums without skimping on coverage.
Check this out if you need additional information, resources, or guidance on car insurance.
Sources:
Car Insurance
Garagekeepers Legal Liability Insurance
Garage Liability or Garagekeepers? That Is the Question
Garage Keepers Liability Insurance
Finding the Best Garagekeepers Insurance for You
Car Repair Insurance
What Does Liability Insurance Cover?
Hearst Autos Research
Hearst Autos Research, produced independently of the Car and Driver Editorial staff, provides articles about cars and the automotive industry to help readers make informed purchasing choices.
