Garage Liability Insurance vs. Garage Keepers Insurance – What Is In A Name?

Auto dealers have a lot on their plate.  Most are independent business people with really no safety net beyond their own wits and cunning.  They must understand the market value of many different types of vehicles and be able to find and deliver that inventory to a fickle public who rarely trusts them.  How do they have time to become insurance experts? 

Garage insurance is a very unusual insurance animal in the insurance world.  Most insurance agents don’t handle enough garage policies to understand them very well.  One set of terms that can be confusing for many dealers who are in the market for dealers insurance is garage liability insurance and garage keepers insurance.  These terms, though they sound the same have very different meanings and it is important that each dealer out there understands these terms and how they might apply to his or her used car dealer insurance policy.

Garage liability is the term that applies to the liability exposure associated with your autos and your inventory.  If you are strictly in the business of selling cars, then this is the most basic coverage that you need in order to obtain your dealer tags.  The most common claim falling under garage liability is when someone is test driving one of your cars and has an accident that injures someone else, or that damages some property.  Without this protection, you are going to have to pay these types of claims yourself.  As you can imagine, one bad claim with a few people in the hospital could bankrupt most small dealers.  So be sure to purchase the highest limits that you can afford when you are considering your garage liability insurance for your dealership.

Garagekeepers insurance is quite different from garage liability insurance.  Garage keepers insurance is for those dealers and repair shops that take in cars owned by others and perform repairs on those vehicles.  While these cars are in your care, custody, or control, you can be held liable for damages to these vehicles.  For instance, if you work on a vehicle, then test drive it to discover the problem or to listen to a noise, then you could be involved in an accident that damages the customer’s car.  In that case you would want garage keepers collision coverage to protect you from having to pay for this kind of loss yourself.  The other sub-category of garagekeepers insurance is called garage keepers comprehensive coverage.  This is protection for losses to the vehicles in your care custody and control that are not caused by collisions.  There are exclusions to this coverage, so be sure that you are familiar with them but  basically this is wind, hail, fire, theft and other losses of that nature to your customer’s cars that are left  with you for repairs.

With the many complexities of a garage insurance policy, and the many options for protection within that form it is important that the used car dealer finds an agent who specializes in helping to insure car dealerships.  Clinard Insurance Group currently insures over 300 used car dealers across the states of North Carolina, Georgia, South Carolina, Tennessee and Virginia.  If you would like help with your dealers insurance, please call us, toll free, at 877-687-7557 or visit us on the web at