Automobile dealers (new and used), repair garages, service stations, storage garages, parking lots, valet parking, drive away or delivery services and towing operations are all considered garages in insurance terms.
Insurance coverage for garages is unique in that in addition to requiring insurance for your property including buildings, contents, and equipment, there is also an automobile liability exposure. The garage liability part of the policy provides coverage for automobile liability including owned vehicles, customer autos while being serviced or repaired, courtesy cars and auto part sales.
Repair facilities have the added exposure of the care custody and control of someone else’s vehicle. This is known as a bailee exposure. Further, you are not only responsible for the action of your employees use of the vehicle but for legal liability of operating the customers’ vehicle. You cannot rely on the customers insurance if you have an accident operating the vehicle. However, the doctrine known as Bailee of Mutual Benefit dictates that both you as the garage owner and the person leaving their vehicle for service both benefit from the relationship. Therefore your liability can be limited to your legal liability. This allows you the lower cost option of extending coverage only for your legal liability as opposed to assuming the full liability while a vehicle is left in your care. Occurrences such as tornado or hail damage would not be covered when you select legal liability.
The standard garage liability form provides coverage for liability arising from garage operations, medical payments, automobile physical damage, and uninsured or underinsured motorists in a single contract for automobile dealers, service stations, auto repair shops and parking lots.
In your policy the garage coverage form provides coverage by classification of covered vehicles, represented in your policy by numbers.
It is important that you understand the meaning of these coverage codes;
- 21. Any auto: the broadest classification.
- 22. Owned autos only: vehicles owned by the insured, including any acquired during the policy period.
- 23. Owned private passenger autos only: vehicles defined as private passenger (for example, a sedan or station wagon). Coverage is not provided on vans or pickup trucks even if they are used only to transport people.
- 24. Owned autos other than private passenger autos only: vehicles not designed as private passenger vehicles (for example, pickup trucks, vans, truck-tractors), including newly acquired vehicles.
- 25. Owned autos subject to no-fault: coverage only for no-fault or personal injury protection on vehicles located in no-fault states.
- 26. Owned autos subject to compulsory uninsured motorist law: vehicles located in a state where uninsured motorist coverage is compulsory. The required coverage is provided under the policy form.
- 27. Specifically described autos: vehicles listed in the policy or supplementary schedule. Coverage is limited to 30 days for newly acquired vehicles.
- 28. Hired autos only: vehicles that are leased, rented or borrowed.
- 29. Non-owned autos used in the garage business: vehicles belonging to employees and partners or their household members, which are covered while being used for the insured's business purposes.
- 30. Autos left for service, repair, storage or safekeeping: customers' vehicles while in the insured's care.
- 31. Dealer's autos and autos held for sale by non-dealers or trailer dealers: this category is only used to provide physical damage coverage, requiring other classifications with it. A further description of the coverage must be included on a supplementary schedule.
At Conner Agency we want you to understand your coverage so that you can make an informed decision. We will take the time to answer your questions and help put together a policy that offers
the very best coverage at the lowest possible price.
Call us today for a free proposal!