FAQs

A commercial auto policy designed to address the needs of auto dealers. Coverages include garage liability, garagekeepers, and auto physical damage; other coverages are available by endorsement. Auto service garages also obtain a garage liability policy. There would be exclusions based on the difference between a dealer and a service garage.

Garage Keepers Liability The garage keepers section of the policy covers the insured's liability for loss to a covered autos or auto equipment left in the insured's care while the insured is attending, servicing, repairing, parking or storing the auto in the garage operation. Garage keepers coverage is necessary because liability for such damages is excluded under the garage liability section of the policy with the care, custody, or control exclusion. The causes of loss that may be insured against are collision, comprehensive, or specified causes of loss. The specified causes of loss are fire, explosion, theft, and mischief or vandalism. The limit of insurance shown in the policy is the most the insurer will pay for each loss at each location listed in the policy. In addition to the limit of insurance the garage keepers policy pays supplementary payments that could be made to cover the cost of expenses incurred while the insurer is defending the insured against suits alleging covered losses.

Legal Liability is abreviated as GKLL. This coverage most commonly is for collision and comprehensive coverage. It can also cover other causes of loss such as fire and explosion. Theft, mischief or vandalism can also be included but these would more likely be shifted over to the Direct Primary coverage.

Coverage applies without regard to liability With direct excess, coverage applies in excess of the vehicle owner's coverage. The vehicle owner's coverage would be the primary coverage and would respond to the claim. The garage owner's Direct Excess coverage would trigger based on the size and type of claim.

Coverage applies without regard to liability. Garage Keepers Liability coverage is intended to provide coverage for damage while the covered auto is in the insured's care (the garage owner). There can be situations where the garage owner is not liable for the damage. To extend GKL to provide coverage regardless of liability, Direct Primary coverage is used.

Direct Primary extends the garagekeepers liability policy to provide coverage for damage to customers' automobiles regardless of the legal liability of the insured. On older policy forms this is referred to as garagekeepers extra legal liability.

If a claim exceeds the limit of the garage policy (the primary limit) then the customers personal auto policy will apply. There can also be situations where a particular type of claim is not covered by the primary coverage but may be covered by the customer's policy.

From a pure coverage standpoint, Direct Primary is better. This is what most customers would expect when they leave their auto in the care of a garage. This coverage will also increase the chance of a claim and claims on a policy have an impact on the rates charged for coverage. Direct Primary will also be the more expense of the two.

The choice of which is better is therefore best left to the garage owner. For instance a body shop may want to simple repaint a car if the paint or finish were vandalized while in their care. If someone were to stell expensive rims from a vehicle then coverage would be really nice to have.

As a broker I will always recommend the coverage that is most extensive and let the insured choose if he is comfortable with less coverage.