Definition
Garagekeepers Insurance is a specialized insurance policy designed to provide coverage for damage to customers’ vehicles while they are in the care, custody, or control of a garageman or auto service business. This type of insurance is crucial for businesses such as auto repair shops, parking garages, car dealerships, and valet services.
Types of Coverage
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Comprehensive Coverage: This type of coverage protects against a wide array of damages that are not collision-related, such as theft, vandalism, fire, or natural disasters.
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Collision Coverage: Provides coverage for damages resulting from a collision, regardless of who is at fault.
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Specified Causes of Loss: Covers specific perils listed in the policy, such as theft, explosion, or vandalism, but not as broadly as comprehensive coverage.
Special Considerations
Limits of Liability
The policy will have a limit on the maximum payout for each vehicle and possibly an aggregate limit for all losses in a policy period.
Deductibles
There can be deductibles for each type of coverage where the policyholder pays a specified amount before the insurance coverage is activated.
Exclusions
Certain exclusions might be detailed in the policy, such as damages due to wear and tear, intentional damage by the insured, or damages caused while vehicles are driven by unauthorized persons.
Examples in Practice
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Auto Repair Shops: A customer’s car is damaged by a fire while in the shop for repairs; Garagekeepers Insurance can cover the repair costs.
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Parking Garages: A vehicle is vandalized while parked overnight; the insurance would cover the resulting damages.
Historical Context
Garagekeepers Insurance emerged as the automobile industry grew, and businesses needed protection against liabilities resulting from their customers’ vehicles under their care. The policy evolved to address the specific risks faced by these businesses, providing peace of mind and financial security.
Applicability
This insurance is applicable to various businesses including but not limited to:
- Auto repair shops
- Towing services
- Valet services
- Car dealerships
- Car wash services
Comparison with Similar Terms
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Bailee’s Customer Insurance: This insurance also covers items in the possession of a business, but it is not limited to vehicles. It can cover diverse goods and products.
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Commercial General Liability (CGL) Insurance: Provides broader coverage for liability claims including property damage and bodily injury but does not specifically cover damage to customer vehicles.
Related Terms
- Liability Insurance: Broad category of insurance covering liability claims.
- Property Insurance: Covers damage to the insured’s own property.
- Business Auto Insurance: Covers vehicles owned or used by a business.
FAQs
Q: Does Garagekeepers Insurance cover employee-owned vehicles? A: No, it specifically covers customer vehicles in the care of the business.
Q: Can this insurance be customized? A: Yes, different coverages and limits can be tailored to the specific needs of the business.
Q: Are all types of damage covered? A: Common exclusions may apply, so it is crucial to understand the policy details and any specified causes of loss.
References
- Insurance Information Institute. “Garagekeepers Insurance.”
- National Association of Insurance Commissioners. “Commercial Auto Insurance.”
- Small Business Administration. “Risk Management Tips for Auto Businesses.”
Summary
Garagekeepers Insurance is a crucial protection for businesses handling customer vehicles. It offers peace of mind by covering unexpected damages, ensuring the business can operate smoothly without the burden of potential high out-of-pocket repair costs. Understanding the specific policies and coverages allows businesses to fully leverage this protection, tailoring it to their unique risks and operational needs.
