THURSDAY, MAY 4, 2017
What is Garagekeepers Insurance?
At its most basic form, garagekeepers insurance is coverage for other peoples vehicles. It pays for damages to a customer's auto left in your care, custody or control.
Don't make this common assumption about Garagekeepers Insurance
A common mistaken assumption is that it is a separate policy, when in fact, it is an optional coverage that can be purchased as part of a garage liability policy. You can read the basics of garage liability insurance in a prior post, "What is Garage Liability Insurance?"
Why should you purchase Garagekeepers Insurance?
Because the garage liability policy excludes coverage for autos in your care, custody and control. If you DON'T have this coverage, then you're on the hook for paying out of pocket if you cause damage to a customer's vehicle. Unless you have a big pot of money set aside to pay these type of claims, (and most don't), it's just good business to have it. It demonstrates that you take your business seriously and you're committed to taking care of your customers.
Three main types of Garagekeepers Insurance available
Legal Liability- provides coverage for only those losses where you are legally liable. An example would be your employee leaves a customer's vehicle key in the ignition and it's stolen as a result.
Direct Primary- coverage applies regardless of liability and provides coverage whether the customer has physical damage on the car or not. Let's say you take every precaution to lock up a car at the end of the day, but a spiteful boyfriend breaks into the garage and steals the car. The insurance would still be responsible with direct primary coverage. We often refer to this as "goodwill" insurance, as it pays regardless of fault.
Direct Excess- coverage applies regardless of liability and provides coverage if the customer has no physical damage on the car. You can see here that if the customer has physical damage coverage, that policy would pay. Otherwise, it would be paid under Direct Excess.
It's important to mention that the state and company you're dealing with will determine which of these three options are available. By far the most readily available (and least expensive) is Legal Liability. However, if you feel like building goodwill with your customers and paying claims regardless of fault, Direct might be a better option for you. Of course, with any insurance, if you have TOO many claims, that could also jeopardize your policy.
Working with a professional insurance agent that specializes in garage liability insurance and garagekeepers insurance is your best option for finding the coverage that works for you. Don't leave your business to chance- contact us today to discuss your garage liability and garagekeepers insurance. This is a specialty of ours and we welcome the opportunity to help you! Visit our dedicated garage liability page and request your garage insurance quote TODAY!
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