Damage to Customers Autos – Garage Keepers Insurance

Garage Keepers Insurance

In the automotive business where vehicles are sold, serviced, repaired, parked, or stored, there is a unique type of insurance needed to cover the autos left in the care, custody, and control of the business. This insurance is commonly referred to as Garage Keepers.

Garage Keepers covers damage to a customer’s automobile left in the business’s care for service, repairs, parking, or storage.  Due to the lack of the business’s financial interest in the vehicle, it is excluded by liability, property, and standard commercial auto policies.

Types of businesses that may need Garage Keepers:

  • Franchised and non-franchised auto dealers
  • Truck, truck-tractor, and commercial trailer dealers
  • Motorcycle, recreational vehicle, and mobile home dealers
  • Automotive repair shops
  • Service stations
  • Car washes
  • Storage garages and public parking facilities

Types of Coverage

  • Legal Liability  applies to a customer’s vehicle damaged due to your negligence; for example, during a test drive your employee wrecks the customer’s car, or items were stolen from an unattended, unlocked vehicle after hours. The customer’s insurance is primary and your garage keepers only applies if your garage is legally liable.
  • Direct Primary covers your customer’s vehicles regardless of who is liable as long as it is in your care, custody and control; for example, a loss due to weather or the theft from/of a protected, locked vehicle will be covered regardless if the loss is due to the actions of the garage without regard to the vehicle owner’s private insurance.
  • Direct Excess provides the same protections as Direct Primary. However, in the event of a loss, Direct Excess will only pay in excess of any other collectible insurance. For example, if a client has comprehensive insurance and the car is vandalized, their insurance would be primary, but if the vehicle had no comprehensive coverage the garage keepers insurance would step in and cover the loss, regardless of legal liability.

Determining Your Coverage Levels

If you have an automotive business, we highly recommend obtaining the correct level of Garage Keepers insurance for your needs.  A small garage with 2 bays and 3 employees that mainly services private passenger vehicles will need vastly different coverage levels from a diesel repair shop, with a warehouse that is servicing semis in its 15 bays. Determining these coverage levels is one of the most important decisions you can make for your shop. This is where a good agent with experience in the automotive field and an understanding of your business is necessary. With the values of vehicles constantly rising, the level you needed 15 years ago is vastly different than what one may need to cover a loss today.

At Guide Insurance, Garage Keepers is one of the areas in which we specialize. With a number of different and exclusive carriers, we can tailor policies to your situation. Please give us a call to help secure your businesses future and ensure you aren’t leaving your business open to unforeseen losses.

Written by: Soren Egertson


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