Garage Lift

Garagekeepers Insurance Explained

Garagekeepers insurance is an often times confusing type of coverage most commonly found on auto repair and body shop insurance policies. It provides comprehensive and collision coverage for a customer’s vehicle while in the business’s care and custody. Not all garagekeepers coverage is the same though, and your level of coverage can vary even with the same insurance company. There are 3 different policy types, with massive differences in coverage and rates. When renewing your policy or purchasing a new one, make sure you understand which form you’re agreeing to, or you could be setting yourself up for disaster down the line:

Legal Liability: This is the most basic form, and least expensive. You only have coverage for your customer’s vehicle is you are found legally negligent for the damage. What does that mean? If you or an employee didn’t physically cause the damage to the car, there is likely no coverage. So where’s the gap in coverage? If someone steals a customer vehicle, there’s a hit and run, vandalism, or you have a fire at your shop over night that you didn’t cause, you may have no coverage.

Direct Excess: The customer’s vehicle insurance pays first, and your insurance will only pay if they have no coverage. This puts the burden of filing a claim and paying for the deductible on your customer. You run the risk of damaging the relationship with your client, who has entrusted you with their car.

Direct Primary: Pays for damage to your customer’s vehicle regardless of fault. This is the most comprehensive form, and will pay for most unintentional damage to a customer’s vehicle while in your care.

Most insurance agents and brokers are only concerned about offering you the absolute lowest price with the most stripped coverage. Most policies don’t list the form of garagekeepers you have at the beginning of the policy; you have to dig around to find it. There’s a good chance you’re unknowingly sitting with very restrictive coverage right now and you won’t find out until you have a costly claim. It’s important to weigh the cost and coverage options between the different forms. Is saving money with legal liability or direct excess worth the risk of upsetting your customer and potentially damaging your business’s reputation? Give us a call to discuss all options.


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