Garage Keepers Insurance

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Garage Keepers Commercial Liability Insurance

What is a Garage Keepers Insurance Policy?

A Garage Keepers (or Garagekeepers) Insurance policy, in its simplest terms, covers customers vehicles that are in your care—in your garage, on your lot, or parked in your parking lot. If damage is incurred from fire, vandalism, theft, or collision, this policy offers you monetary protection.

In some states it is referred to as ‘Storage Location Insurance’ or ‘On-Hook Coverage’ (though typically the latter refers to coverage for vehicles being towed by a tow truck). 

Garage keepers liability is offered in three basic insurance coverage options:

  • Legal: This covers damages for which you have been proven legally liable, i.e., damages to a customer's vehicle due to your negligence.
  • Direct Excess: This covers damages regardless of fault or liability, but doesn’t cover the full cost of the damage. It simply pays the excess beyond what the customer's primary insurance policy does not cover.
  • Direct Primary: This option covers damages regardless of fault or liability, typically due to weather related incidents or theft—as long as you made concerted effort to protect the damaged vehicle. 

Direct Primary provides broader coverage and typically is more expensive than both the legal or direct excess options. You can choose to have your garage keepers option cover "Specified Perils" or "All Risk/Comprehensive Perils". As with all insurance coverage, be aware of any exclusions written in your liability policy. 

Who Needs Garage Keepers Insurance?

Any business that fixes or otherwise operates on motor vehicles should consider a garage keepers policy. While not an exhaustive list, these are some businesses that should consider the coverage: 

  • Auto Body Repair Shops
  • Auto Repair Shops
  • Tow Truck operators
  • Auto Glass Installers
  • Oil Change Services
  • Car Detail & Cleaning businesses
  • Emissions testing sites
  • Interior restoration companies

What Is Excluded From Garage Keepers Coverage? 

There are a few things that are excluded from these policies:

  • Damage due to improper or faulty workmanship of the manufacturer
  • Warranties that don’t have the proper coverages
  • Items inside the car that may have been damaged 

Coverage for a customer’s personal items in the car can be written into your overall policy, which you should consider as a courtesy to your customers. It must be noted that exclusions are anything that are not permanently installed in the auto. 

Is Garage Keepers Different Than Garage Liability Insurance?

The short answer is yes—Garage Keepers Liability and Garage Liability are different coverages. As we already established, Garage Keepers covers damage to automobiles that are under your direct care. These two policies are typically purchased hand-in-hand. 

Garage Liability Insurance protects your small business from liability if there is third party bodily injury or property damage incurred during business operations by your equipment. It also protects the business against discrimination or slander claims. However, it doesn’t protect you from damages to the customer’s vehicle—which is where Garage Keepers insurance comes into play. 

How Much Does Garage Keepers Insurance Cost?

The cost of your policy partially depends on the limits and deductibles you choose for your garage keepers liability coverage. Also, the option you choose—Legal, Direct Excess, or Direct Primary—will determine the maximum amount of coverage available on a per-incident basis. On average, you can expect to pay between $1,000 and $1,300 annually (but there are many variables factored in). 

Discuss with your insurance agent appropriate limits and deductibles you should choose to adequately insure your business operations. Consider how your limit might affect you in case of catastrophic loss. Limits offered will vary state-to-state and between insurance carriers, so find an experienced agent who is familiar with the coverage—or connect with one of ours.

Related Pages >> Garage Liability Insurance - Tow Truck Insurance - Commercial Vehicle Insurance

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