Garagekeeper’s Coverage
Garagekeeper’s insurance is designed for businesses, like a repair shop, that have custody of a client vehicle. It provides protection for client vehicles from damage while they are being stored, parked or serviced.
FAQs
What does garagekeeper’s insurance cover?
Garagekeeper’s coverage is a type of specialty auto insurance that businesses use to protect client vehicles while those vehicles are in their custody. Garagekeeper’s covers losses arising from fire, theft, vandalism and collision. Usually garagekeeper’s coverage provides three primary coverage options.
- Legal liability
This is the most common type of garagekeeper’s insurance. It covers loss only when an employee is legally liable for the damage to the customer’s vehicle, whether from negligence or a mistake.
Example: One of your mechanics is test driving a customer’s vehicle to try to recreate an issue. During the test drive, the mechanic crashes the vehicle, resulting in severe damage.
- Direct primary
This type of garagekeeper’s coverage protects the customer’s vehicle, regardless of who is liable or at fault. The garagekeeper’s policyholder is able to take full responsibility for the customer’s vehicle while it is in their care.
Example: A thief breaks into a locked customer vehicle that is being held at your repair shop. The thief steals the vehicle.
- Direct excess
This type of garagekeeper’s coverage is similar to direct primary coverage. The main difference between the two is that if the insured is not liable, the coverage only pays in excess of what is collectible under the customer’s own auto policy.
Example: A fire breaks out at your repair shop and damages a customer’s vehicle. The customer has an auto policy that includes comprehensive coverage. The customer’s auto policy would pay out first and if the damage exceeded the amount of the customer’s policy limit, then the repair shop’s policy would begin paying.
What doesn’t garagekeeper’s insurance cover?
Just like other types of insurance, garagekeeper’s coverage does not offer protection against all risks. There are several standard exclusions that can be part of a garagekeeper’s policy, including:
- Faulty workmanship
- Vehicle theft by the insured
- Defective parts and materials
- Personal items left in the vehicle by the client
- Radar detection equipment
- Loss of stereo equipment that is not permanently installed
Who needs garagekeeper’s coverage?
If your business offers vehicle towing, storage, service or repair, you should invest in this coverage to ensure you are protected. In particular, any business that regularly takes custody of a customer’s vehicle, could benefit greatly from having garagekeeper’s coverage. The below list includes examples of such businesses:
- Auto body shops
- Car dealerships
- Detailers
- Parking garages and lots
- Repair shops
- Service stations
- Emissions tests shops
- Valet services
- Window installers
- Tow-truck operators
- Electronics installers
- Customization shops
- Quick lubes
What does garagekeeper’s coverage cost?
Like other types of insurance coverage, the price of garagekeeper’s depends on your business operations and the limits selected. Other factors that can be used to calculate premium for this coverage include: your business location, the types of vehicles you service and the average number of vehicles you service on a daily basis.