Various businesses involve employees operating, servicing, or simply watching customer vehicles. These companies range from small businesses that do invasive and extensive work on a vehicle, like repair and body shops, to those that only superficially interact with it, like a car wash, to those that simply move a customer’s car, like a restaurant or club that provides valet services. The risks these businesses undertake go beyond their actual work on a customer’s vehicle; the simple act of storing or possessing the car makes you potentially liable for damage. Any business that even temporarily cares for a customer’s car needs garage keepers’ insurance.

In this guide, we will provide information about garage keepers’ insurance costs to help you make the best decision about your own policy.

We Cover in This Guide

• How much does garage keepers’ insurance cost?
• What is garage keepers’ insurance?
• What does garage keepers’ cover/not cover?
• Types of garage keepers’ insurance
• Benefits and risks
• Tips for buying (how to get cheaper garage keepers’ insurance)
• FAQ
• Summary

How Much Does Garage Keepers’ Insurance Cost?

Garage keepers’ insurance cost varies depending on the details of your business, like annual revenue, location, customer base, vehicle type serviced, and number of vehicles attended to per day. If your location is in a high crime area, or the vehicles you service are expensive, your policy costs will likely be higher than average. Rates are also impacted by choice of coverage, limits, and deductible. Typical policies cost between $1,000 and $1,300 per year, but they can be as low as $800 and as high as $2,000.

What Is Garage Keepers’ Insurance?

Garage keepers’ insurance is an essential policy for any business that involves taking possession of a customer's vehicle. Depending on the nature of your business, a car may be stored or parked longer than it is actually being serviced. And often, during these states, vehicles are less closely monitored and may be at greater risk. In addition to harm from the work itself, damage to or theft of a customer’s car while simply in your custody can ruin your reputation and be extremely costly. This policy makes sure your client’s property is safe and protects your business in case of a lawsuit.

What Does Garage Keepers’ Cover/Not Cover?

Garage keepers’ insurance protects you if a client’s vehicle is harmed or damaged while being serviced or in your possession. Some covered risks include:

• Fire
• Theft
• Extreme weather
• Vandalism at your business
• Other accidental damage, like collision

These policies do not cover damage from faulty service, parts, insufficient warranties, and employee theft. Additionally, customer possessions inside their vehicles, including non-factory stereo equipment, are exempt from common policies. You can choose to add endorsements of client property to extend such coverage.

The main risk not covered by garage keepers’ insurance is liability protection from bodily injury or property damage from an accident. Garage liability insurance is necessary for this type of coverage.

Types Of Garage Keepers’ Insurance

Garage keepers’ insurance coverage is a policy meant to protect your customer’s property while in your care. The covered scenarios include damage caused by your actual service, accidents outside your control, and malicious acts by outside forces. The following are the forms of protection provided by garage keepers’ insurance.

• Legal liability: Most common type of coverage. Protects a customer’s vehicle from harm resulting from your company’s negligence.
• Direct primary: Coverage for damage caused by outside forces, like theft or extreme weather. You are protected no matter who is at fault.
• Direct excess: Pays damages in excess of your cost collectible.

Benefits and Risks

When you service someone’s car, you are often dealing with one of their most expensive and prized possessions. There are countless ways your work or the acts of others can harm a vehicle in your care, whether you are responsible, or through no fault of your own. No matter the scenario, you may be held liable and face a lawsuit. Garage keepers’ insurance provides protection if such a case occurs. Customers will also feel more comfortable bringing their vehicle to a shop that is properly covered. Additionally, full coverage will allow each employee to focus on their work. Garage keepers’ insurance is not only relevant in case something goes wrong, but it can also expand your business and ensure you are able to recruit the best people.

How to get Cheaper Garage Keepers’ Insurance

When considering garage keepers’ insurance cost, keep the following in mind before making your decision:

• Bundle policies: Add garage keepers’ insurance to your general liability policy. Companies will often provide discounted rates when you combine certain key coverages.
• Compare quotes: Policy premiums vary between insurers. Consider at least three quotes to find the best rates and coverage.
• Work with an independent agent: An independent insurance agent will help direct you toward providers with the best rates and those that have the most experience with your industry.
• Identify your risks: Be sure to thoroughly analyze your business to identify potential risks. After that, choose the proper limits and include all the applicable coverages.

FAQ

What can I do to reduce the risk of accidents that could harm a customer’s vehicle?

• Make careful and safe practices a priority over efficiency.
• Establish fire prevention techniques and make sure that proper safety equipment is easily accessible.
• Check employee driving records before hiring.

What is the difference between garage keepers’ insurance and garage liability insurance?

Garage liability insurance protects your business against claims from accidents that occur during business operations, but harm to customer vehicles is excluded. Garage keepers’ insurance covers damage to or theft of a client’s car.

How can I prevent vehicle theft?

• Install surveillance equipment and hire security.
• Have proper lighting at night.
• House vehicles inside with locked fencing surrounding your business.

Summary

Garage keepers’ insurance protects your company against financial ruin if your business activities lead to a lawsuit. In addition to the cost of mounting a defense, a prolonged trial without coverage could result in bad press and a damaged reputation that you may not be able to overcome.

By understanding garage keepers’ insurance costs and determining your needs, you can know that your policy covers potential risks and feel secure that your business is safe.