Let’s say you’re the owner of a busy auto repair business. A customer leaves his car for you to work on, and you say you’ll get to it tomorrow. During the night, vandals break all the windows. Who is responsible? If you have Garage Keepers insurance, you’ll be covered and the customer’s windows will be repaired under the policy.
This is not to be confused with garage liability insurance. Garage liability insurance, or also referred to as general liability for garage businesses, covers bodily injury or property damage caused by something that happened out of garage operations. Your mechanic takes the customer’s vehicle on the road so they can see if they can replicate that funny noise the customer says they hear. While driving the customer’s car, your mechanic gets into an accident. This would be covered under garage liability insurance.
It’s a little confusing because all of this used to be under a Commercial General liability policy, but these days anything having to do with autos falls under either Garage Liability or Garage Keepers insurance.
- Best 4 Providers of Garage Keepers Insurance
- What is Garage Keepers Insurance and Who Needs It?
- What is the Difference between Garage Keepers Insurance and Garage Liability Insurance?
- What does Garage Keepers Insurance Cover and Not Cover?
- What is On-Hook Towing Insurance? How is it Different from Garage Keepers Insurance?
- Garage Keepers Insurance Limits: What are They?
- How Much does Garage Keepers Insurance Cost?
Best 4 Providers of Garage Keepers Insurance
- Progressive: Best for Comprehensive Coverage
- Coverwallet: Best for Online Quotes
- Auto Risk: Best for Residents of CO, TX, MI, KS, AZ, UT, NM, WY
- Farmers Insurance: Best for Tailored Policies
Progressive: Best for Comprehensive Coverage
Progressive offers Garage Keepers Liability insurance, but it’s difficult to get a quote online for this policy specifically. They bundle it with Liability insurance and On-Hook towing insurance before you can purchase Garage Keepers Liability coverage.
It looks like you can choose to get a quote for this coverage, but when you click “Quote online” you get this:
As you can see, Garage Keepers insurance is not listed, so we conclude they want you to call.
Coverwallet: Best for Online Quotes
Coverwallet works with many insurance companies to provide you with quick online quotes. In addition to Garage keepers insurance (sold with garage liability) they can offer you any business insurance you might need. If you are unsure of what coverage you need, they can help you figure that out.
For our hypothetical auto repair shop in CT with four employees, Coverwallet gave us this information:
Auto Risk – Best for Residents of CO, TX, MI, KS, AZ, UT, NM, WY
If you live in one of the state’s they insure, Auto Risk can provide you with a quote for Garage Keepers insurance, as well other policies you might need. They have lot of information, including links to YouTube videos, and they are a good resource for anyone in the auto industry.
They did ask for pages of information for a quote, including driver’s license numbers, which we didn’t feel comfortable providing for a hypothetical business.
Farmers Insurance – Best for Tailored Policies
Farmers insurance provides Garage keepers insurance as well as other small business policies your auto repair shop might need. They can help you figure out what and how much insurance you need.
Every time we entered a zip code, however, Farmers said a quote for our area was unavailable. However, on the bottom of the page “Auto Service and Repair Shop Insurance” it said to call an agent to discuss our business.
What is Garage Keepers Insurance?
Garage Keepers insurance, also called Garage Keepers Liability coverage, protects you if a customer’s car is damaged while it’s at your auto repair shop or towing company.
If you have a general liability policy, you may think you’re covered, as general liability covers third party property damage. However, general liability will not cover a car left in your care. So, while you still need general liability insurance, you’ll need Garage Keepers insurance as well.
Who Needs Garage Keepers Insurance?
Anyone who has customers’ cars in their possession, like:
- Service stations
- Auto repair shops
- Auto body shops
- Car dealerships
- Tow truck drivers
- Auto glass installers
- Motorcycle dealerships
- Trailer and motorhome dealerships
- Oil change and lube shops
If you have multiple locations, you’ll need a policy for each location.
What is the Difference between Garage Keepers Insurance and Garage Liability Insurance?
While garage keepers insurance covers the damages or loss of a car while being at your shop due to reasons that are not from the garage operations, garage liability insurance protects you if a customer’s car is damaged due to the operations of the garage. For example, if a customer’s car is in your shop overnight and some damages happen to it due to vandalism or theft, garage keepers insurance will cover it. On the other hand, if a customer’s car is damaged while you are trying to fix it or it is damaged by accident as you work in another car next to it, that damage is covered by garage liability insurance.
In addition, garage liability insurance also protects you if your customers or anyone else get injured at your shop. Garage liability insurance covers both bodily injuries and property damages while garage keepers insurance only covers property damages, the car itself.
What does Garage Keepers Insurance Cover and Not Cover?
Garage Keepers covers you if a customer’s car, truck or van is damaged while it’s on your property. It’s frequently sold with a Garage Liability policy, but it’s a separate contract and a different policy.
Garage Keepers insurance offer three levels of coverage.
- Legal liability: This protects the customer’s car due to the insured’s negligence. This covers you only if you are liable for the damage.
- Direct Primary: This covers you if customers’ cars are damaged due to weather, theft, or the mechanic, whether you are at fault or not.
- Direct Excess: This is like direct excess, except that it pays only in excess of any other collectible insurance. For example, if your customer has comprehensive insurance and a hailstorm damages his car while it’s on your lot, his comprehensive will cover his damages first, and anything still not covered will covered by your direct excess policy.
What doesn’t It Cover?
Garage keepers insurance will not cover:
- Damage from faulty workmanship, parts, or out-of-date warranties
- Loss of stereo equipment not permanently installed
- Radar detection equipment
- Defective parts
- If the vehicle is stolen by you or one of you employees
What is On-Hook Towing Insurance? Is it Different from Garage Keepers Insurance?
In Texas and Virginia, garage keepers insurance is called storage location insurance. The word “garage keepers insurance” in these two states is referred to “on-hook towing insurance”.
On-hook towing insurance covers damages of the car while you are towing. For example, you are towing a customer’s car on a raining night. As you are trying to offload the car from the towing truck to park inside the garage, you hit another car which is coming from behind and has the right-of-way. The repair cost for the damage is estimated to be $2,500. The on-hook towing insurance limit of $25,000 and $500 deductibles will pay $2,000 after your deductible of $500.
Garage Keepers Insurance Limits: What are They?
Garage keepers insurance covers the damages of the car while being in your shop. However, it does not cover everything. This means that there are limits in the garage keepers insurance coverage.
Craftsmanship faults and manufacturer’s defects or malfunctions are not covered. All the contents in the car are not covered either.
How Much does Garage Keepers Insurance Cost?
According to Tow Truck Insurance, a Garage Keepers Liability policy will cost somewhere between $1,000 and $1,300 annually, on average.
You need to shop around with a few companies to get the best price. You can compare several quotes conveniently by providing your and your garage’s information to a digital broker like CoverWallet or Simply Business.
What should I Consider When Looking For a Garage Keepers Policy?
To figure out how much insurance you need, estimate the average cost of the vehicles you work on and the average number of cars you have on your premises at one time. That will give you a ballpark figure on how much insurance you’ll need.
Consider how much of a deductible you’re comfortable with, and how much of an insurance limit you want. Higher limits with lower deductibles cost more money, should you also figure out how much you can spend.
- Garage Keepers insurance is a niche insurance policy, frequently (though not always) sold with Garage Liability insurance. If you run your own auto repair shop, you’ll probably want both.
- Garage Keepers insurance will cover you in case something happens to a customer’s car while it’s in your shop.
- You don’t want to risk your auto repair business by not having the proper insurance.