Garage Keepers Insurance [What you NEED to Know]

What is a Garage Keepers Insurance Policy?

Garage Keepers Insurance (Garagekeepers insurance or garagekeepers legal liability) in its simplest terms, covers customers vehicles that you are parking or storing—in your garage or parked in your parking lot. If property damage is incurred from fire, vandalism, theft, or collision, during garage business operations, this policy offers you financial protection.

In some states it is referred to as ‘Storage Location Insurance’ or ‘On-Hook Coverage’ (though typically the latter refers to coverage for vehicles being towed by a tow truck).

Garage keepers liability insurance is offered in three basic insurance coverage options:

Legal Liability: Legal liability coverage helps pay for damage to a customer vehicle for which you have been proven legally liable, i.e., damages to customer's vehicles due to negligence while in your shop.
Direct Excess: This covers damages to a customers vehicle regardless of fault or liability, but doesn’t cover the full cost of the damage. It simply pays the excess beyond what your customers primary insurance policy covered.
Direct Primary: This policy option covers damages regardless of fault or liability, typically due to fire, theft, extreme weather, or vandalism—as long as you made concerted effort to protect the damaged vehicle.

Direct Primary provides broader coverage and typically is more expensive than both the legal liability or direct excess options. You can choose to have your garage keepers option cover "Specified Perils" or "All Risk/Comprehensive Perils". Having the proper coverage for your service can help sway a customer your direction. If they know their auto is well protected in your hands, you may earn a customer for life. As with all insurance coverage, be aware of any exclusions written in your liability policy.

Who Needs Garage Keepers Insurance?

Any business that fixes or otherwise operates on a customer vehicle should consider a garage keepers policy. While not an exhaustive list, these are some businesses that should consider garagekeepers coverage:

Auto Body Shops
Auto Repair Shops
Tow Truck operators
Auto Glass Installers
Oil Change Services
Car Detail & Cleaning businesses
Emissions Testing Sites
Interior Restoration Companies
Service Stations
Auto Dealers
Parking Garages

Any garage operations where customers vehicles are stored on site for any length of time should consider garage keepers legal liability coverage to protect their shop.

What Is Excluded From Garage Keepers Coverage?

There are a few things that are not covered by garagekeepers coverage:

Damage due to improper or faulty workmanship of the manufacturer
Warranties that don’t have the proper coverages
Items inside the car that may have been damaged

Coverage for a customer’s personal items in the car can be written into your overall policy, which you should consider as a courtesy to your customer. It must be noted that exclusions are usually anything that are not permanently installed in the car.

Is Garage Keepers Different Than Garage Liability Insurance?

The short answer is yes—Garagekeepers Liability and Garage Liability Insurance are different coverages. As we already established, Garage Keepers covers damage to a customer's auto that is in your repair shop. These two policies are typically purchased hand-in-hand.

Garage liability insurance is a type of general liability coverage that protects your small business from liability if there is third party bodily injury or property damage caused during business operations by your employees or equipment. It also protects the business against discrimination or slander claims. However, it doesn’t protect you from damages to the customer’s vehicle—which is where Garage Keepers insurance comes into play.

How Much Does Garage Keepers Insurance Cost?

The cost of your policy partially depends on the limits and deductibles you choose for your garage keepers liability coverage. Also, the option you choose—Legal, Direct Excess, or Direct Primary—will determine the maximum amount of coverage available on a per-incident basis. On average, you can expect to pay between $1,000 and $1,300 annually for your garage business (but there are many variables factored in).

Discuss with your insurance agent appropriate limits and deductibles you should choose to adequately insure your business operations. Consider how your limit might affect you in case of catastrophic loss. Limits offered will vary state-to-state and between insurance carriers, so find an experienced agent who is familiar with the types of garage keepers coverage—or connect with one of ours.

Get a FREE Garagekeepers Liability Insurance Quote

You want every vehicle in the care of your business to be covered in case the unthinkable happens. To get a free quote for garagekeepers coverage for your shop, complete the form at the top of the page. Or give us a call at 1-877-907-5267 to speak directly with an agent. We'll help connect you with the right garagekeepers insurance for your business!