Garage keepers insurance is part of a garage policy that auto dealers, body shops, and repair shops have. It protects them from liability if a customer’s vehicle is damaged while in the garage’s possession for repairs, bodywork, or storage. This type of liability insurance is essential for small auto businesses because it protects them from financial disasters.
What Protection Does Garage Keepers Insurance Offer?
Altogether, garage keepers insurance can provide three types of protection to an auto shop.
- Legal liability – Legal liability is one of the most expensive types of claims that this policy will protect against. This coverage protects the garage owner from damages caused by employees’ negligence.
- Direct Primary – This coverage protects your customer’s property if it is damaged by extreme weather or stolen. It applies regardless of who is at fault for the damage.
- Direct Excess – This is similar to direct primary coverage in that it is activated regardless of fault. However, rather than covering the total amount of the theft or damage, it will only cover the amount that the owner’s original policy does not cover.
This type of insurance is ideal for:
- Towing companies
- Detailers for cars
- Auto body shops
- Gasoline stations
- Car washes
- Repair shops
What Is the Cost of Garage Keepers Insurance?
The cost of garage keepers’ insurance varies. So you’ll need to get a quote to find out how much your policy will cost. Some of the factors that can affect the cost of your premium are as follows:
- Location of the company
- Vehicles for which you provide service
- How many vehicles do you handle in a day?
- The coverage limits that you select
While the insurance company will consider the factors mentioned above when determining your premium amount, most businesses will pay between $1000 and $1300 per year on average. Rates can range from $800 per year to $2000 per year.
Additional Coverages with a Garage Keepers Insurance
While a standard garage liability policy includes several coverages, the garage keepers policy can provide coverage that the standard policy does not.
It protects your customers’ vehicles from the following types of damage:
- Theft
- Fire
- Weather-related damages
- Vandalism
- Accidental damage
What Does Garage Keepers Insurance Not Cover?
Garage keepers insurance covers customers’ vehicles while they are in your care, but it typically excludes property contained in the vehicle, such as:
- DVDs and CDs
- Factory stereo equipment
- Items stored in a trunk or glove box
It also does not cover damage caused by poor or faulty quality, worn-out parts, or a lack of warranty.
Know the Difference Between Garage Keepers and Garage Liability Insurance
Most repair shops, dealerships, and storage facilities carry garage liability insurance to protect their business from liability for bodily injury or property damage if an accident occurs during business operations. It functions as a hybrid of general liability and business auto insurance, covering medical and repair costs.
This type of policy includes the following coverages:
- Injuries to uninsured third parties
- Property damage caused by business equipment
- Products manufactured or sold by the shop that cause damage to another person’s vehicle.
It is important to note that this policy only covers third-party claims and not the vehicle itself. Garage keepers insurance covers the cars under your care in the event of an accident, regardless of who is at fault.
How Much Does Garage Keepers Insurance Cost?
Garage Keepers liability insurance ideally costs between $1,000 and $2,000 yearly on average. However, the actual rate can vary based on the type of business and its size, location, type of vehicles handled, deductibles and coverage limits, claims history, and type of operation.
Sara Sam may not look like your typical car and finance expert, but don’t let that fool you. With over four years of experience in the industry, she knows all the ins and outs of cars, car insurance, and refinancing. You can trust Sara to help you navigate the often-confusing world of automobiles and financing.
