If you own any type of automotive service business, such as a car repair shop, a towing company, a service station, a parking garage or a carwash hub, you know there are certain risks the vehicles in your care are exposed to. It is essential to protect your business from these liabilities and the most effective way to do this is by purchasing a garage keepers insurance policy.
What Is Garage Keepers Insurance?
Garage keepers liability insurance is a form of specialty coverage that shields the vehicles that clients leave with automotive companies for repairs or other services. Depending on the policy, garage keepers’ insurance may cover several types of vehicles including cars, vans and trucks.
In some states, this type of protection is called “storage location insurance.” Most garage keepers insurance policies cover client vehicles against four primary perils: collision, fire, vandalism and theft.
Aside from auto body shops and towing companies, other automotive businesses that can benefit from garage keepers insurance include valet services, oil change servicers and windshield installers.
Additionally, some insurers provide garage liability policies that function as combinations of general liability insurance and commercial auto coverage. In these cases, covered damages could include third-party injuries, property damage, structural repairs and liability costs.
Types of Garage Keepers Coverage
It’s important to carefully choose the appropriate coverage based on your business’s needs and the types of risks it carries. Here are the three main coverage options that a standard garage keepers insurance policy includes:
Direct Primary Coverage
Direct primary coverage ensures that a customer’s vehicle is covered no matter who is at fault for damages to the automobile. As a garage owner, you would assume total liability for all vehicles entrusted to your business.
For example, if a client’s vehicle is stolen, direct primary coverage would pay for losses despite the fact that you are not directly responsible for this incident. In this case, the client would not need to file a claim and could have peace of mind knowing their automobile is protected regardless of what occurs.
Legal Liability Coverage
Legal liability coverage only pays for losses if one of your garage’s employees is lawfully responsible for damages to a client’s vehicle, regardless of how they cause these damages. For instance, should a mechanic crash a car during a test drive, legal liability coverage would pay for any resulting damage.
This type of coverage is similar to direct primary coverage but is less common. The main difference between the two coverage is that if the insured is not responsible, direct excess coverage would only pay over any amount that can be collected under the vehicle owner’s auto policy.
For example, if a fire destroys both a client’s van and your business and the customer has comprehensive coverage, that coverage would pay for damages to the vehicle. After the coverage limit is reached, direct excess would help cover any remaining damages.
What Does Garage Keepers Insurance Not Cover?
Although garage keepers liability insurance is highly beneficial, it does not cover all types of auto-related liabilities. Here are some notable coverage exceptions for this kind of policy:
- Defective vehicle parts
- Faulty workmanship
- Theft of vehicles by an insured
- Contractual obligations with a dealer
- Radar detectors
- Loss of non-permanently installed stereo equipment
- Personal belongings customers leave inside their vehicles
Cost Of Garage Keepers Liability Insurance?
The cost of this policy typically depends on many factors, including:
- Your location
- The types of vehicles you serve
- The average number of automobiles you service daily
However, according to CoverWallet, average annual premiums for garage keepers insurance fall between $1,000 and $1,300.
If you are a car dealer that needs higher-than-average protection, you may end up paying up to $2,000 for a policy.
Speak To The Garage Keepers Insurance Experts
Contact the professionals at Pro Insurance Group for more information about garage keepers’ insurance. Our agents are dedicated to serving as one-on-one advocates for our clients, regardless of their insurance needs. Our wide range of carrier options is designed to help clients meet both their needs and budget. We also strive to build and maintain strong relationships with all of our clients.
We provide comprehensive towing and trucking insurance policies, as well as general liability and commercial umbrella policies. Regardless of the size or type of automotive business, you own and the number of vehicles you service daily, our team will work to ensure that your unique coverage needs are met. Call Pro Insurance Group today at 833.619.0770 or contact us online to request a quote or to learn more about our policies.