Do you run a small business that deals with cars or automobiles? If so, you’re probably wondering what type of insurance is best for your business. Garage keepers insurance is a policy that many shop owners use to protect their customers’ vehicles while in their care. In this article, we’ll explore what garage keepers insurance covers and explain the differences between garage keepers insurance and garage liability insurance.
What is Garage Keepers Insurance?
Garage keepers insurance, also known as garage keepers liability insurance or storage location insurance in some states, is a specialized policy that auto businesses use to protect vehicles entrusted to their care for service or repair. It provides property insurance coverage for the client’s car, safeguarding it from perils such as fire, theft, vandalism, and collision.
Types of Garage Keepers Coverage
When selecting garage keepers insurance, you need to make an informed decision based on the coverage options available. Here are the three primary coverage options:
1. Legal Liability Coverage
Legal liability coverage is the most common type of garage keepers insurance. It covers losses when an employee is legally liable for damage to a customer’s vehicle due to negligence or mistake. For example, if a mechanic crashes a vehicle during a test drive or forgets to set the parking brake resulting in damage, the insurance protection would apply.
2. Direct Primary Coverage
Direct primary coverage ensures that the client’s vehicle is covered regardless of who is at fault. It allows the garage owner to take full charge and responsibility for any vehicle kept in the shop, giving customers peace of mind. For instance, if weather damages a car or a thief steals a locked vehicle, the insurance coverage would pay for damages or losses even if the garage did nothing wrong.
3. Direct Excess Coverage
Direct excess coverage is a less common but slightly cheaper alternative to direct primary coverage. Similar to direct primary coverage, it pays only when the insured isn’t liable and only in excess of the amount collectible under the owner’s standard auto policy. For example, if a customer’s truck is destroyed by a fire that burns down the shop, and their vehicle is insured under their personal auto policy with comprehensive coverage, the comprehensive coverage would kick in. Once the coverage limit is reached, direct excess coverage could help cover the remaining damages.
Who Should Have Garage Keepers Insurance?
If your business regularly takes custody of a customer’s vehicle, you assume a significant amount of risk. It is crucial to ensure your business is covered with garage keepers insurance. Businesses that should have this insurance include body shops, car dealerships, custom shops, detailers, electronics installers, oil change servicers, parking garages and lots, repair shops, service stations, tow truck operators, and more.
Exceptions and Restrictions
It’s important to note that garage keepers insurance doesn’t provide carte blanche protection from all risks. Several damages won’t be covered, including faulty workmanship, contractual obligations with a service station or dealer, vehicle theft by an insured, loss of unpermanently installed stereo equipment, radar detection equipment, defective parts, and personal items left in the vehicle by the client.
Garage Keepers Insurance vs. Garage Liability Insurance
Many small business owners in the automotive industry confuse garage keepers liability insurance with garage liability insurance. While they sound similar, these two policies differ in protection and coverage. Garage keepers insurance specifically safeguards the customer’s vehicle from unexpected damages such as fire, theft, vandalism, and collision. On the other hand, garage liability insurance protects the business itself from general liability issues that may arise during daily operations.
Protecting Your Garage the Right Way
Garage keepers insurance is one of the best ways to give customers peace of mind and mitigate their worries. However, it’s essential to ensure your business is also protected from third-party liability with a general liability insurance policy. At Car News, we understand the importance of reducing your risk profile and keeping your business running smoothly. That’s why we recommend considering Thimble, an insurance provider that offers flexible coverage options for small businesses.
With Thimble, you can purchase insurance policies by the hour, day, or month, only paying for the coverage you need while you’re on the clock. Getting a general liability policy is fast and easy; just download the Thimble mobile app, input some details about your business, and receive a quote within 60 seconds. You can then purchase the policy directly from your smartphone, with a certificate of insurance (COI) delivered to your email inbox or phone instantly. You can even add Additional Insureds or generate more COIs for free, right from the app.
Remember, protecting your clients’ cars is your top priority, and Car News and Thimble are here to help you keep your business firing on all cylinders.
FAQs
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Conclusion
Garage keepers insurance is a vital policy for businesses that regularly take custody of customers’ vehicles. It provides protection against various perils and gives customers peace of mind. By understanding the coverage options and the differences between garage keepers insurance and garage liability insurance, you can ensure your business and your clients are well-protected. Don’t forget to explore Thimble for flexible insurance coverage options tailored to the needs of small businesses in the automotive industry. Stay safe and keep your business running smoothly!