Opening your garage door each morning to a lot full of customer vehicles brings significant responsibility. Whether you run a small repair shop in Liverpool or a large dealership in Syracuse, your customers trust you with one of their most valuable assets.
But many auto service businesses don't realize their standard business insurance may leave gaps when it comes to vehicles in their care.
At the Horan insurance agency, we work with carriers throughout Central New York and aim to share information about coverage considerations for auto service businesses.
In this article, we'll explore how garage keepers insurance works, what it typically covers, when businesses might need it, and how coverage differs between service centers and dealerships. We'll also look at situations that Central New York auto businesses face and how this type of insurance can address various scenarios.
How Service Centers and Dealerships Face Different Insurance Challenges
The coverage needs vary by business model. A family-owned repair shop in Baldwinsville has different considerations than a dealership in Utica, and those who both service and sell vehicles have unique combined needs. Service-only operations can include garage keepers coverage as part of their overall business insurance, while dealerships need additional coverage to account for their owned inventory.
For service centers, coverage focuses on customer vehicles during maintenance and repairs. A policy can address damage from incidents like spring storms in Central New York or accidents during post-repair testing.
Dealerships carry additional exposure with their vehicle inventory. Location security plays a role—an open lot presents different considerations than an enclosed showroom. Insurance carriers typically structure coverage based on these variables.
The Critical Components of Garage Keepers Coverage
When severe weather strikes Central New York, multiple customer vehicles could sustain damage while in your care. Consider this scenario: You have twelve customer vehicles on your lot when a hailstorm hits. While you can quickly move three vehicles inside, nine sustain damage.
A garage keepers policy may limit your total out-of-pocket costs to $2,500 for the entire incident, rather than charging separate deductibles that could exceed $4,500.
Collision coverage follows a different structure since it involves vehicle operation. With a test drive incident, you'll face a single deductible. The policy can respond to both the customer's vehicle damage and potential liability for other affected parties. However, the coverage excludes defective repairs or parts—those remain the shop's responsibility.
Managing Vehicle Inventory and Additional Business Coverage
Dealerships work with inventory coverage structured on an actual loss sustained basis. Your premium typically reflects an agreed-upon value that accommodates inventory fluctuations, eliminating the need to report each time you exchange vehicles of different values.
Some service centers also operate tow trucks to retrieve disabled vehicles. This requires separate business auto coverage beyond garage keepers insurance. Each coverage type serves a specific purpose in your overall insurance program.
Why Products and Completed Operations Coverage Matters
Consider this scenario: A customer picks up their car after brake service at your Camillus shop. Two days later, they experience brake failure on Route 5. Products and completed operations coverage can address damages resulting from completed work, but it won't cover redoing the original repair.
This distinction highlights why auto service businesses benefit from understanding their coverage structure. Insurance responds to unexpected issues from completed work while encouraging quality control in service delivery.
A Strategic Approach to Garage Keepers Coverage for Your Central New York Operation
Running an auto service business involves many daily challenges. Insurance gaps shouldn't be one of them. Yet some shop owners remain uncertain about their coverage until facing a claim.
As a Central New York insurance agency serving the auto service industry, we aim to inform businesses about available coverage options through our carrier relationships. We can discuss your operation's specific circumstances and share information about garage keepers insurance considerations.
Click the Get a Quote button below to learn about insurance options from an agency familiar with both industry coverage and local Central New York considerations.
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