Garage Insurance Versus Garage Keepers Insurance – What’s the difference?

garage insurance versus garage keepers insuranceGarage Insurance Versus Garage Keepers Insurance – What’s the difference?



You own an auto service-related business, this can be an auto repair shop, a tire shop, a muffler or transmission garage, an auto body shop, or any other type of auto garage business and you may be questioning what’s the difference between garage insurance and garage keepers insurance?

They sound like the same thing, right?

Well not exactly and in this video and post, I’ll explain the differences and similarities and what you need to know, coming right up

The terms garage liability and garage keepers may sound similar they are two different coverages often found on the same policy usually called a garage policy.

Garage Liability

Garage Liability will cover the liability exposures of a garage or auto-related business.

This includes the premises risks in and around the shop, including the typical slip and fall type claims that can occur, as well as auto liability claims that can arise while you are operating a customer’s car on a test drive.

In addition, if the garage owns vehicles such as tow trucks they too would be covered under the garage liability section of a policy.


Garage Keepers insurance on the other hand covers the potential physical damage to your customers’ vehicles while in and on your garage property. These are your risks of comprehensive and collision.

Two separate coverages. One focused on liability the other on physical damage which is another way of saying comp and collision.

Garagekeepers – Two Forms of Coverage

Now Garage Keepers insurance can be written on either a legal or direct primary basis. Let me explain the difference here.

Legal Garage Keepers

This is common and it’s cheaper than primary, but it’s not better.

Legal means that your insurance will kick in and cover your customer’s vehicles for physical damage only if you were legally negligent in causing the damage to the vehicle.

Here’s an example.

You lock your customer’s vehicle in a well-lit and fenced-in lot overnight and a vandal climbs the fence and damaged a bunch of cars with spray paint.

That claim for the damage to your customers’ cars is not going to be covered under legal garage keepers.

You did everything you could to protect those vehicles so you weren’t negligent in that loss and your policy won’t cover the damages.

That means your customers will file claims on their personal auto policies, their rates may go up, and they pay the deductibles out of pocket. How happy do you think they’re going to be in that situation?

I can just see the social media posts flying around bashing your company and how they had to pay for damage to their vehicles in your custody. That’s going to hurt your reputation and the trust you’ve built up in your community, and ultimately damage your business.

The second type of garage keepers coverage is direct primary.

Under direct or primary coverage it doesn’t matter who’s fault or negligence caused the loss.

Therefore, your insurer will pay for physical damage claims – comp and collision – of your customers’ vehicles while those vehicles are in your care, custody, and control.

Yes, the primary is a bit more expensive, but in my opinion, it’s worth it.

No potential gap in coverage, no hassle if the claim isn’t covered by legal, and it helps protect your business’s reputation you’ve worked hard to establish.

Not sure which form of protection you have?

I’d suggest reading your policy, or calling your agent to find out so that you don’t get caught in a situation like I described and have an angry customer or customers scorching you on social media!

Have other questions or concerns I didn’t cover here?

Want to get a quote on your garage policy?

Looking for garage insurance for the first time?

Reach out and let’s talk about what you need.

I’d love to hear from you!

I work across the country and love helping business owners with their risk and insurance issues so let’s chat.


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