Have you ever wondered about the welfare of your motor vehicle whenever you've had to leave it at your mechanic's for a night or two? What would the compensation procedure be like if a tragedy were to occur in your mechanic's garage with your vehicle on the premises? Or have you ever thought about operating a garage yourself but then scrapped the idea due to the risk of any harm coming to your client's vehicles while in your care?
The fears mentioned above and many more like them are well-founded since operating a garage is a high-risk, high reward business. Some of the risks involved when running a garage include; theft of a customer's vehicle, bodily harm to either customers and employees, and incidents such as fires or vandalism in a garage's premises.
Several insurance policies exist to cover the risk mentioned above and more, but one has to be keen on which one they go for. While it may seem that one policy provides an umbrella cover over every risk, the finer details of the policy may rule out compensation on a matter of technicality.
What Is Garagekeepers Insurance and Who Is It For?
Garagekeepers insurance, also known as 'storage location insurance' in some jurisdictions, protects against damages to a customer's vehicle in the form of vandalism, fire, and theft. The extent of the cover's protection is limited to the motor vehicles in the garage's premises.
Sold mostly in tandem with this cover is the garage liability insurance. Unlike the garagekeepers insurance, garage liability insurance has a more human-centered approach to the risks it covers. These risks include; injuries that may be incurred by a client or employee and damages that may occur from contact with the vehicles in the garage.
The garagekeepers-insurance policy is designed for enterprises in motor vehicle repair, storage of one or more motor vehicles, car detailing, car washing, vehicle maintenance, and certainly towing and recovery companies.
Although the garagekeepers-insurance policy may seem straightforward at first glance, there are some finer details that one must go through carefully with their insurance agent. One such technicality is the case of motor vehicle repair and detailing businesses that have mobile operations. For businesses that do not have a fixed premise or base of operation, compensation or lack of it may all come down to the simple fact of who moved the vehicle from one point to another during the repairs.
Difference between garagekeepers legal liability and garagekeepers direct primary
While both Garagekeepers Legal Liability and Garagekeepers Direct Primary offer protection against damages that may occur to a customer's vehicle in the garage, and their implementations differ based on the cause of the damage.
In Garagekeepers Legal Liability, the main factor to consider in a claim is the person(s) responsible for the damage for which compensation becomes viable. A claim would only be deemed valid and thus warrant payment if the insured (policy holder) or those under their command are responsible for the damage. This means that for compensation payout to be done, it would first have to be proven that the damages to a customer's vehicle were caused by either the owner or an employee of the garage.
Unlike Garagekeepers Legal Liability, Garagekeepers Direct Primary provides a rather 'all-inclusive' cover to the damages that may occur to a customer's vehicle. Who caused the said damages are not the main concern area in Garagekeepers Direct Primary regarding compensation determinations. As long as the motor vehicle damages occurred in the insured's business premises, that is good enough for payout considerations to be made.
Due to their highly contrasting natures of compensation considerations, Garagekeepers Legal Liability and Garagekeepers Direct primary have highly distinct premium prices. The former has relatively cheaper premiums since the insurer cannot compensate if someone, not a garage employee, causes the damages.
However, regardless of its relatively cheaper premiums, Garagekeepers Legal Liability may prove to be more expensive in the long-run. Suppose a customer and not an employee are proven to be legally liable for damages, but the former feels that the latter had some involvement. Though the said involvement might be anything minute as failure to direct the customer as they reverse their car, a customer would feel dissatisfied. This would then cause loss of trust in the business, and though difficult to prove, bad reviews from one customer can go a long way in chasing away potential clients.
How is garagekeepers liability rated?
Like most other insurance policies, Garage keepers Liability Insurance does not exist or operate on fixed rates. Though some terms in the policy may be constant from one client to another, most aspects of the policy are customized to the client's scenario and, in some instances, their preferences.
One of the aspects that may be constant regardless of the client's setting is the policy's legal bindings. An example of this is the insured's contractual obligations to pay their premiums monthly, quarterly, semi-annually, or annually. On the part of the insurance company, they are under contract binding to honor their clients' compensation claims if proven that the terms for the said claims to be made are met.
Ratings available for garagekeepers liability
Specified Cause of Loss
This covers the damages caused by theft, fire, and vandalism, all of which must occur within the insured's business premises.
This covers the damages to a customer's motor vehicle from any cause. In contrast, the vehicle is on the garage's premises, except when the motor vehicle collides with another vehicle or overturns.
This supplements the Comprehensive coverage since it caters for the damages caused when the customer's motor vehicle collides with another vehicle or gets overturned.