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We have prepared a complete self-explanatory guide about Garage Keepers Liability different from Garage Liability.
You get to know the difference and functions about the two insurances.
Garage keepers liability and garage liability are both types of insurance policies for mostly auto dealerships.
However, while they sound too similar, they are not the same – there are quite many things that distinguish the two.
We have previously written about car dealership insurance policies and how you can choose the perfect one(s) for your business.
Today, we are going to explain the unique differences between insurance policies.
If you’re confused about these two policies, you’ll be cleared at the end of this article.
To explicitly explain these two types of insurance coverage, let’s take sequentially. What is “garage keepers liability,” and what is garage liability?
Garage Keepers Liability different from Garage Liability
Garage Keepers Liability
Take, for example; you took your car to a dealership to get it repaired; so, it was parked in the dealership’s garage.
Apparently, you expect to get back your car intact and fixed. But, what if something happened and your car got stolen or damaged while parked in the dealership’s garage, what would you do?
You’ll definitely want the dealership to pay/fix the damages or probably get you a new ride (if yours was stolen).
To you end, you may not have any expenses to make, but for the dealership, it has to provide your stolen car or repair damages without charging you a fee.
Now, that can be a huge expense to make (for the dealership); nevertheless, if the dealership has an active garage keepers liability coverage, the expenses will be handled by its insurer.
So What Is Garage Keepers Liability?
This type of auto dealership insurance covers quite a couple of risks that can emerge because you run a dealership business.
The coverage is for cars parked in a dealership’s garage but not owned by the dealership.
As explained in the previous paragraph, when a customer drives in his car to be fixed by a dealership, an active garage keepers liability coverage will cover for any damage that may happen to the car.
However, this type of insurance isn’t limited to car dealerships only; businesses such as car service stations and repair shops can also apply for this coverage since they always have other people’s cars in their possession (under their care).
One can’t perfectly predict what’s going to happen sooner or later; we can only guess based on scientific discovering or physiologies.
Thus, if you run a business that allows other people to bring in their car to your garage, it is advisable that you apply for this insurance coverage.
More so, there are different insurance companies that provide garage keepers liability coverage with handy add-on packages for extended coverage.
Now, that we’ve explained garage keepers liability, it’s time to go over to the next similar insurance coverage – garage liability coverage.
Garage Liability Coverage
Here’s another scenario – as a car dealership business, obviously, there are fleets of cars parked in your garage.
You bought these cars and wished to resell them to your customers or new buyers.
But, what if a fire disaster happens and you lost a massive number of cars to that, how would you cover up the expenses?
That is where to talk about garage liability coverage. This insurance coverage will pay for damages and losses to your dealership business.
What is Garage Liability Coverage?
It is simply the opposite of garagekeepers liability coverage – this coverage is for the cars you own.
Any damage to a car (owned by your dealership) will be taken care of by this coverage.
Whether it is a car theft situation, natural disaster, or any other covered accidents, an active garage keepers liability coverage will take care of all that.
However, you should know that this policy is STRICTLY for vehicles owned by your dealership and not customers’ or other people vehicles.
We’d strongly advise dealerships to apply for this coverage – it is one of the most important insurance coverage for such businesses.
Garage Liability Coverage isn’t only for dealerships; it is open to everyone that runs a garage business and has many owned cars.
This coverage will save you quite a huge sum in the case of accidents and other covered stuff.
What is The Actual Difference Between Garage Keepers Liability and Garage Liability
Let’s assume you run a dealership business. A customer bought a car from your dealership, and sometimes later, the customer brought back the vehicle to get it fixed.
So, a mechanic (working in your dealership) hops into the car to test drive it to discover the issues.
However, during the test drive, the mechanic drove the customer’s vehicle to collide with another vehicle in your garage and probably totaled either the customer’s vehicle or the other vehicle parked in the garage.
The customer’s vehicle is covered by “Garage Keepers Liability,” while the other vehicle parked in the lot is covered by “Garage Liability.”
With this brief explanation, apparently, you have understood the difference between these similar insurance policies; one covers the cars in your garage that is owned by your dealership, and the other covers other people’s car brought to your lot for one reason or another.
However, different insurers can include exclusions and add-ons to these policies. Also, the costs of these policies differ from one insurer to another.
There are other similar policies that confuse people just as Garage Keepers Liability and Garage Liability.
For example, Liability Insurance and Physical Damage Insurance are quite similar but cover different prospects.
We recommend these (both) policies for auto dealerships – they are very important to save you huge cost when a customer’s car collides with one of yours, and they both totaled.
There are other features that can be included in these policies depending on your insurer. But do you think these policies are as important as they appear?
Also, some states have mandatory policies that must be acquired by auto dealerships.
Furthermore, we have written many tips on how to choose the best insurance coverage for your dealership, kindly read them up and choose from the list. Have a nice day.