What is garagekeepers insurance?
The definition of garagekeepers insurance is essentially this: it will protect your business if you have clients’ cars in your care, custody, and control. It will help you by covering your clients’ cars against things like vandalism, theft, fire, and explosion. Since you’re responsible for taking care of the car, you’re responsible for the vehicle if something happens to it.
*Note: If you live in Texas or Virginia, you would know garagekeepers insurance as storage location insurance.
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How much garagekeepers insurance do I need?
Each business needs different amounts of insurance. To find out how much coverage your business needs, you’ll need to figure out two things: how many cars you have in your care at any given time and the average value of those vehicles. Then you basically just multiply those two numbers together to get a general idea of how much garagekeepers insurance you need.
Let’s say that you’re a tow truck business and usually have five cars on your lot for storage or parking. Each of those cars costs about $20,000. You would need to purchase at least $100,000 of garagekeepers coverage (5 x 20,000) to make sure that the clients’ cars are fully protected. This is just a ballpark estimate to give you an idea of the limit of coverage you need.
What does garagekeepers insurance cover?
Let’s illustrate with an example.
You’re a tow truck business and you get a call at midnight to go rescue a stranded car and driver. You find the driver, who’s really happy to see you, and hook their car up to your tow truck. Then you give them a ride and bring the car back to your business’s premises because the shop the client wants to take the car to isn’t open. You drop off the car and go home. Then, at 3 am, a thief hops your fence and steals the car.
You’re moving a client’s car to a different location on your property, but you turn a corner and plough the car into a parked tow truck. There’s a good amount of damage to the car that you were moving, and you’re in a bit of a panic trying to figure out how to explain it to the customer. Thankfully you have garagekeepers insurance to help you cover the costs of repairing the customer’s car.
What is a per-vehicle deductible?
Garagekeepers insurance comes with a per-vehicle deductible. Your deductible is the amount you agree to pay if you face a loss or have a claim; the insurance company pays the rest (up to your policy’s limit.) The per-vehicle part of the deductible means that you have to pay your deductible for every car that was damaged. For example, if you have three cars on your lot and you have a per-vehicle deductible of $1,000, you would pay $3,000 if those cars were destroyed in a fire and the insurance company will cover the rest of the cost.