The difference between Garage Liability coverage and Garagekeepers coverage is similar to the difference between liability insurance and physical damage insurance. The first covers the insured’s liability for operations and autos and the other covers damage to customer’s vehicles. All garage operators need both insurance coverages to properly insure their loss exposures.
Buy Garage Liability and GarageKeepers Insurance Coverage
A typical garage business has an auto exposure (owned, non-owned and hired) as well as premises/operations, contractual and products/completed operations exposures. Rather than writing two separate policies, the Garage policy allows you to combine the coverages into one Policy. Therefore, a Garage Policy is a combination Business Auto Coverage form and a Commercial General Liability Coverage form. Garage liability insurance is an absolute necessity for the owner of a car dealership, a local mechanic, a tire dealer, a company doing oil changes, and similar business models. These policies are for employers who make a living working on cars owned by other people. These programs are also for companies installing stereos or satellite radios.
Do not make the mistake with the assumption believing Garage Liability Insurance would cover the loss of a customer’s auto while in your care. A separate Garagekeeper’s policy or addendum to the garage (service center) policy already written must be in place.
Under the Garagekeeper’s coverage, there are two options for the auto service operator to consider. One is called direct excess coverage that pays up to the value of the destroyed vehicle above the owner’s coverage, and the other is direct primary coverage in which the service owner’s carrier shares the loss with the car owner’s insurer. If you have a repair center that has a fleet of tow trucks or dispatched repair vehicles, those assets are covered under Garage Liability Insurance. However, the customer cars sitting outside waiting for service, or inside on that lift are not covered and this is the reason why you need the “keeper clause” for your protection. Please note that most Garagekeeper’s Policies excludes loss to non-factory installed sound equipment. Garage Liability Insurance providers may become extremely discriminatory regarding the requirements for getting the insurance, such as strict loss prevention or risk management efforts by the auto service owner.
To cut costs and keep insurance premiums lower, indemnity companies are often refusing to underwrite such things as wind and hail damage for company and customer vehicles.
And tolerance by insurers for multiple incidents at a garage is limited. Meaning insurance companies are quick to get off policies with claims. Make sure every employee and officer of the company is listed on the policy. Coverage is usually only afforded to the locations and drivers listed on the coverage. Employees that get a DUI or go over their state point allowances may be excluded from driving privileges and non-company drivers need to be discussed with the insurance agent who wrote the policy. Getting and keeping garage liability insurance can be daunting. Proper night lighting, well landscaped grounds, well maintained signage and windows as well as a freshly painted exterior as well as clean floors and bathrooms inside can make or break a policy being approved. Most carriers rely heavily on site inspections during the underwriting policy.