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USAinsurance.com Garage Liability Insurance Coverage for bodily
injury, property damage or destruction, for which the insured garage
and/or its representatives become legally liable resulting from the
operation of the garage. For example, negligent repair to a customer's
automobile brakes cause them to fail, thereby injuring the driver. The
garage faces a liability suit for perhaps three types of damages: special,
general, and punitive.
Garage
Insurance - Coverages and
Definitions
(This
section is designed to help you understand the insurance coverages available to you.)
NOTE:
Following is a summary of coverages offered to
Independent Dealers by the majority of the insurance companies who offer
and write garage insurance. State laws vary considerably as do the
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offerings
of various insurance companies. As such, not every insurance company will
offer every coverage listed below and in some
cases, insurance laws and regulations are not the same from
state-to-state. It is suggested that the reader consult with their
professional insurance agent or representative for advice and counsel
regarding these coverages and definitions.
Further, the terms and definitions noted are a summary only. The actual
policy issued to the Dealer by the insurance company constitutes a legal
contract and should be carefully reviewed.
Liability
coverage protects you against property damage and bodily injury arising
out of your dealership operations. Traditionally the coverage is separated
into auto and other than auto
(
premises
) coverages.
a)
Garage
Liability:
Provides
coverage for bodily injury, property damage resulting from operations
involving the ownership, maintenance or use of a covered
automobile/vehicle. This coverage is typically written at limits that meet
a state’s financial responsibility law and may be available at limits
above those minimums (called excess or umbrella limits
) . This coverage does not cover accidents not involving a covered
vehicle that is typically defined as a vehicle held in inventory by the
insured dealer. For example, garage liability insurance will not cover
at-fault accidents involving a dealer’s personally owned vehicles unless
the garage insurance company has agreed by contract to cover such
vehicles. The policy has covered auto symbols, the broadest being symbol
1, any auto, or symbol 2, owned vehicles. Note:
It is advisable to incorporate your business to protect your personal
assets in the event a claim exceeds your limit of insurance.
*
Insurers typically price this coverage based on number of employees and
non employee drivers. It is very important that you limit the number of
drivers.
b)
Garage
Operations:
Provides
coverage for bodily injury or property damage resulting from garage
operations other than the ownership, maintenance or use of a covered
vehicle. Such coverage is typically written at limits of $100,000 per
occurrence but this may vary considerably from company to company and
state to state. Typical claims would be slip and fall on your
premises.
c)
Limits:
Ask
for several limits of liability. Typically you will find only a small
dollar difference between a $500,000 and a $1,000,000
limit.
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What
is the coinsurance clause?
Quite
simply, if you insure your automobile inventory at less than value, the
company will pay only a percentage of the claim. For instance, if you have
inventory valued at $200,000 when a hail storm hits, but insured for only
$100,000, the insurance company is only obligated to pay you 50% of your
claim. So if the loss was $50,000, the carrier will pay only $25,000 less
your deductible. The limit should be checked each month to insure proper
level of insurance.
Limit
per unit, in transit and other locations:
Limit
per vehicle:
Be
sure you have the limit per vehicle high enough to cover your most
expensive vehicle. Most policies have a standard $25,000 limit and many of
today's cars are worth more than that.
In
transit and other locations:
Coverage
is provided while your vehicles are off premises,
say at an auto auction or repair facility. Pay attention to this limit if
you have a portion of your inventory off site. Typical limits are only
$25,000 and you have to ask for higher limits if
needed.
What
does dealer's open lot cover?
1) Comprehensive: Provides coverage to a covered auto/vehicle or equipment attached
thereto from any cause of loss except collision with another object or
overturn.
2) Specified Causes: Provides coverage to a covered vehicle or it’s equipment caused by
fire,
the sinking, burning or derailments of any conveyance transporting the
covered vehicles.
3) Fire and Theft: Provides coverage to a covered auto/vehicle or it's equipment caused by
fire,
4)
Collision:
loss
or damage to a covered auto caused by it's
collision with another object or
overturn.
5)
False
Pretense:
Provides
coverage to a covered auto/vehicle caused by someone who causes the dealer
to voluntarily part with a covered auto/vehicle by trick, scheme, or under
false pretense or the dealer acquiring a vehicle from a seller who did not
have clear and legal title. The key here is voluntarily. For instance, if
you allow an unaccompanied test drive, and the driver does not come back,
this is a false pretense claim. NOTE: Most policies exclude false pretense
and you have to ‘buy back’ the coverage.
. 6) Additional Persons Insured: Adds “spouse or partner” as insureds and provides
coverages
7)
Broad
Form Products Liability:
Provides
coverage for property damage liability for products
8)
Medical
Payments:
Provides
coverage for payment of medical expenses incurred as a result of an
accident involving a covered auto/vehicle or as a result of an accident on
the dealer’s premises. Under most medical payment policy
conditions, payment will be made, up to the limits specified, regardless
of fault.
9)
Uninsured
Motorist:
Provides
coverage for bodily injury or property damage to a dealer’s covered
vehicles or authorized operators resulting from an accident caused by a
person driving without liability insurance. Many states require that
uninsured motorist coverage be included in all private passenger and
garage liability policies.
10)
Underinsured
Motorist:
Provides
coverage for payment for bodily injury or property damage when the other
party to the accident is negligent (at fault) and their liability limits
are insufficient tocover the damages or injuries
sustained by the dealer.
11)
Personal
Injury Protection:
This
coverage provides for payment of economic losses sustained in a motor
vehicle accident, regardless of fault. The major difference between
Personal Injury Protection and Medical Payments coverage is that Medical
Payments only covers actual medical bills. The Personal Injury Protection
coverage typically provides for payment of medical bills, lost wages or
income, hospitalization, cost of caretakers and any other financial loss
resulting from the accident up to specified policy limits. This coverage
is not available in all states.
12)
Non-Owners:
Provides
coverage for accidents occurring while operating a non-owned vehicle. Typically, this coverage will be
in excess of any policy covering the non-owned
vehicle.
13)
Umbrella:
This
coverage is designed to protect the dealer from catastrophic loss
resulting from an at-fault accident or negligent operation of a covered
vehicle. Typically, this coverage is activated when the underlying or
basic liability limits provided under the dealer’s liability policy is
insufficient to pay for the losses to the injured third
party(s).
14)
GarageKeepers:
Provides
coverage for legal liability for damages to vehicles that the dealer does
not own that are left in the dealer’s care, custody or control. This would
include vehicles being held for service, repairs, parking, test-driving
and possibly consignment by policy extension. There are typically two
coverage options available: 1) Direct Primary: Provides coverage to the
dealer even if the loss is not the dealer’s fault and is not legally
liable and 2) Excess: Provides coverage
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over
the recovery limit the actual owner or customer has from their own
insurance company and will typically pay if your customer does not carry
his own insurance.
Please
Note: The information contained in this Web site is provided solely as a
source of general information and
resource. It is a not a statement of contract and coverage may not
apply in all areas or circumstances. For a complete description of
coverages, always read the insurance policy,
including all endorsements.
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