Garage Keepers Insurance: Coverage, Definition, & More

Thang Truong
Thang Truong
Updated on:

I don’t need to tell you that cars and other vehicles are expensive to repair. And if you store them on your business property and one or more become damaged, it could cost you a lot. In the case of a fire or severe vandalism, it could be enough to put you out of business.

The best way for tow truck operators, mechanics, and auto repair shops to protect against damage to vehicles stored on business property is to secure adequate garage keepers insurance.

This article will reveal the top 5 garage keepers insurance companies, along with everything you need to know to purchase coverage right for your business.

What is garage keepers insurance? 

Garage keepers insurance, often referred to as garage keepers legal liability insurance, provides protection if vehicles owned by customers that are in your care are damaged by fire, theft, vandalism, or collision.

What does garage keepers insurance cover?

Here are just two examples:

  1. You operate a tow truck business. You receive a call to tow a broken-down car late at night. The mechanic’s garage closed hours earlier, so you store the vehicle in your business location overnight. Unfortunately, criminals break into your garage and vandalize the car. Gate keepers insurance would pay to repair the damage up to policy limits.
  2. You run an auto repair service. One evening, your security system breaks down, and someone steals a customer’s SUV, and it’s not recovered. Gate keepers insurance would pay for a replacement vehicle up to policy limits.

These examples help demonstrate the value of garage keepers coverage.

Am I required to get garage keepers insurance?

Garage keepers insurance is optional coverage. It’s designed for business owners who offer towing or repair services. It protects your customers’ vehicles when you keep them at an insured location for storage while performing service.

Interesting fact: In Virginia and Texas, garage keepers legal liability coverage is called storage location insurance. In these two states only, on-hook towing insurance is then called garage keepers legal liability coverage.

Garage keepers insurance vs. garage liability insurance

Garage keepers insurance is a policy that covers damage to a client’s vehicle while it’s in the care of your business for things like fire and vandalism. It can also cover the theft of a customer’s car. Garage liability insurance is broader and covers customer injuries that happen at your business location and damage to client property while conducting business.

For example, if you own an auto repair shop, and a customer falls in your shop and gets injured. Garage liability insurance will pay for the client’s medical costs and other costs if they decide to sue you.

If your mechanic causes damages to a client’s car while trying to repair it, garage liability insurance will cover this and pay to repair or replace the damages caused by your mechanic.

Important note: Businesses with more than one location will need a garage keeper’s policy for each one. 

Learn more about the differences between these two coverages here and if you need both .

Why is garage keeper’s insurance important?

Vehicles are costly, and a single incident related to one or more of them on your property could put your operation out of business. Businesses with adequate garage keeper coverage can eliminate that risk.

Who needs garage keepers insurance?

If your business offers towing or vehicle repair services, garage keepers coverage is something you should consider purchasing because it protects you when you’re storing customers’ vehicles. More specifically, the following types of businesses usually get the coverage:

  • Body shops
  • Muffler shops
  • Tow or impound lots
  • Transmission shops
  • Tire shops
  • Vehicle repair shops
  • And many more.

How much does garage keepers insurance cost?

On average, garage keepers insurance costs around $1,000 to $1,300 a year.

The cost depends on many factors, including:

  • The type of work your business does
  • Coverage needs and limits
  • Claims history
  • Types and value of vehicles covered
  • The insurer
  • And more.

It’s essential to get several quotes for garage keepers and other related insurance online or through an insurance agent and compare them to ensure you’re getting the coverage you need at a fair price.

Learn more at how much garage keepers insurance costs

What other coverages do tow and auto repair businesses need?

Some coverages they often purchase include:

  • Garage liability coverage protects you if a customer or other non-employee is injured on your business property or if you or someone who works for you damages someone else’s property while conducting business. Learn more at the best garage liability insurance companies.
  • Commercial auto covers vehicles used for business purposes, including tow and pickup trucks.
  • On-hook towing covers damage that happens to cars when you tow them.
  • Business income insurance helps recover some of your lost income if you can’t operate your auto repair shop or towing operation for reasons covered by your insurance.
  • Workers’ compensation provides benefits to employees injured or who become ill because of work-related reasons. Your state will likely require you to get this coverage if you have employees. Learn more at the best workers comp insurance companies and the cheapest workers comp insurance companies.

You may be required to purchase liability insurance and on-hook towing protection to obtain garage keepers legal liability coverage. Learn more at the best tow truck insurance companies and the best auto repair shop insurance companies.

There are many more types of protection your business may need. An experienced business insurance agent or company representative can advise you on what coverage is right for you. It’s also likely that an online quoting request system will help you identify the coverages your business should apply for.

Limits, deductibles, and other details about garage keepers insurance

You must select a limit for garage keepers coverage, which represent the maximum amount of protection available to you per incident. So, no matter how many vehicles are damaged or their value — you will only be covered up to your policy limits. That’s why you must get adequate protection based on the type and number of vehicles your business regularly houses on its property. For example, if you select a $2,500 limit on your garage keepers policy, that’s the maximum amount it will pay out per event, no matter how much damage or loss occurs.

You also must select a per-vehicle deductible for your policy, which is how much you have to pay out of pocket to repair or replace each auto damaged in an incident before your coverage kicks in. For example, if you have a $500 per-vehicle deductible, that’s how much you’d have to pay for repairs for each car damaged in an incident before your insurance company pays up.

Best garage keeper insurance companies

Many companies offer garage keepers insurance, either as a stand-alone policy or an add-on to your main business insurance policy. We have done the research and here are our recommendations of the top insurers offering garage keeper insurance and what makes each bast at what they do.

Thang Truong
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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