Garage Keepers Insurance – Meaning, Requirements, and Other Details

  • By: mvadmin
  • Date: May 2, 2021
  • Time to read: 5 min.

Every business type requires financial and other security measures to keep their venture safe forever. For today, we are going to talk about businesses and retail shops associated with the automotive industry.

Most businesses like – service stations, car dealerships, and other random repair shops often require a garage keepers insurance plan to strengthen their basic liability policies. This structure is most relevant with customers who leave their vehicles at a service station for repair, replacement and other maintenance services. The overall expenses and insurance policies for every case may vary based on the condition of the vehicle.

If you are clueless about the literal meaning of garage keepers insurance, then here are some details waiting for you.

What is garage keeper insurance?

Garage keepers’ legal liability insurance coverage is an optional coverage that is designed for business owners running repair shops or any other business type in connection with the automotive industry. Generally, it works to cover a customer’s vehicle covered under a storage or parking lot for repairing issues.

However, it works as an optional service, but most businesses running an automotive service-providing venture prefer to consider it. This is an essential factor of safeguarding the customers’ property (in the form of vehicles) kept on the business’s premises. This insurance cover is referred to as location insurance in some regions, making it more elaborative for people to understand.

In case the customer’s vehicle is destroyed, damaged, or stolen when under the custody of an automotive business, repair service provider, service station, etc., the garage keepers insurance can help to fulfill the damages. There are some exceptional perks like – covering the maintenance cost of the vehicle. This totally depends on the plan availed.

Who needs to undergo the garage keepers liability insurance plan?

In case your business is in towing services or vehicle repair services, you can consider availing garage keepers insurance plans for your venture. It can be seen as a constructive step towards building a more substantial customer base relationship management practice.

Deductibles and limit of garage keepers insurance plan

A business holds the exclusive rights and potential to decide the overall limit for the garage keepers’ insurance coverage. It is determined based on coverage amount availed and other pre-occurrence bases, making it straightforward for the business owner and insurance company about the defined terms. Once you have helped a legit garage keepers insurance, it covers all types of damages under one insurance plan. Then no matter a car or a fleet of damaged vehicles, the overall damage recovery amount is protected under the garage keepers insurance plan availed. Therefore, you need to be familiar with the apt coverage limit.

There are plenty of insurance coverage plans available to choose from. Before you make your mind to go for a particular plan, don’t forget to see if it works the best for your region or not. In general, the typical coverage limit is $2,500 per occurrence approximately.

Furthermore, you as a repair shop or service station owner must select a per-vehicle deduction plan of $500 per vehicle. This means you would require to pay $500 to replace or repair the cars at your service station. Besides this, the rest of the amount is paid by the insurance company.

What covers under the garage keepers coverage plan?

As already said, this insurance coverage plan safeguards the vehicles of the customers at the service station; it works on the custody, vehicle access, and other relevant factors improving the overall vehicle’s security. The basic policy of a garage keepers coverage plan is that it ensures the customer’s vehicle servicing, repairing, parking, attending, storing, and other expenses.

Generally, all the garage keepers intend to purchase and cover all the coverage types under one insurance plan. This helps them save a few bucks under the liability portion of the insurance plan. Here are three types of most common coverage plans that come under a garage keeper insurance plan –

  1. Direct primary – This type of coverage looks through the customer’s vehicle details, regardless of liability coverage. Here in case of loss caused due to unfavorable weather conditions and theft cases, the vehicle’s entire value is protected under the insurance plan acquired. The overall damage claim depends on the value of the insurance plan. Therefore, insurance plan advisors recommend going for an insurance cover with the maximum amount.
  2. Legal liability is one of the most common types of perks covered under the garage keepers insurance plan. The protection of the vehicle applies to the damages done due to the utter negligence of the insured person. Some of the most common illustrations of the same are – mechanical damage that occurred while testing the customer’s vehicle. Generally, it happens during the test drive.
  3. Direct excess – Although it is one of the rarest options to be chosen, it’s the best if you get to experience it. This form of insurance cover gives you complete protection against the customer’s vehicle. Regardless of liability and the loss amount, you can get direct primary coverage access following the legit set of formalities crafted for this insurance plan. The only significant difference witnessed in this insurance claim is there is no liability for paying in excess under any circumstances.

In most cases, the garage keepers’ insurance cover can be amended to the existing business insurance plan, which extends and ten folds the perks of an already availed business cover. Here, the business owner needs to keep a hawk’s eye on the number of vehicles insured under the plan, defining it as more appropriate for the customers. Although you may get ample coverage options but prefer going for a full-fledged business insurance plan covering all the facilities and factors.

The final word

Garage keepers liability insurance works as a full-fledged protection plan for vehicles kept under the custody of repair shops or service stations. The insurance plan is acquired under the name of the garage business owner, which makes it clear that the vehicles’ responsibility depends on the business owner’s head. Talking about the insurance plan’s exact terms and conditions may vary from business to business.


Photo by Enis Yavuz on Unsplash