Garage Keepers Insurance. What It Is and Why Auto Repair Shops Should Have It

Your customers expect their vehicles to emerge from your shop better than when they entered. Garage keepers insurance can give you an added layer of coverage, protecting vehicles from damage or theft while in your care. Here’s how it works and why your auto repair shop should invest in a solid policy.

Do I Need Garage Keepers Insurance?

Garage keeper’s liability insurance is a policy designed to protect automotive businesses from liability when working on customer vehicles. These policies cover things like:

• Theft
• Damage
• Vandalism
• Fire
• Flooding
• Loss

Given the cost associated with vehicle loss or damage, it’s vital that repair shops invest in some type of coverage to protect themselves from unexpected events.

Types of Garage Keepers Insurance

Garage keepers insurance comes in a few different varieties. Here’s an overview of each:

Legal Liability Coverage

This type of coverage protects your business when you are directly responsible for the damage or loss of the vehicle. In other words, this coverage will protect you from negligence or mistakes made to a customer’s vehicle.

Direct Primary Coverage

Direct primary coverage is the most comprehensive. This type of coverage protects the vehicle while it is under your care, regardless of the origin of the damage or who is responsible.

Direct Excess Coverage

Direct excess coverage also protects the owner’s vehicle regardless of who caused the damage. But direct excess covers the excess of what the owner’s primary policy is designed to cover.

Why Auto Repair Shops Should Have Garage Keepers Insurance

Why should your auto repair business invest in garage keepers insurance? Having a policy in place confers several key benefits.

Financial Protection

Garage keepers insurance will cover the cost of repairing or replacing a customer's vehicle. Otherwise, your business will have to cover the costs, which could place you under considerable financial strain.

Customer Confidence

Customer trust is vital for any business. Communicating your insurance policy can give your customers added peace of mind when leaving their vehicles under your care. As a result you can develop further customer loyalty and boost your shop’s reputation.

Legal Compliance

Depending on your jurisdiction, garage keepers insurance may be an actual legal requirement. Ensuring that your policy is up to date will help you avoid penalties and fines. It also demonstrates a total commitment to professionalism. 

How to Choose the Right Policy

Like any insurance product, coverage will vary by type and location. When selecting a policy for your auto repair shop, make sure to consider factors such as:

• The type of coverage you need
• The types of vehicles you service
• Insurance coverage limits
• Exclusions or restrictions
• Policy premiums and deductibles

Choosing the right policy can help you cover your business without taking on excess overhead costs. However, if cost is an issue, you might consider a dual pricing system such as the one provided by Simpay. This program allows you to charge cash customers a lower rate, eliminating the cost of credit card processing fees.

Delivering Exceptional Confidence

If you run an auto repair shop, garage keepers insurance will be an important investment. You’ll stay on top of compliance standards and deliver your customers another level of confidence.