Garagekeeper’s Liability Insurance – Legal Liability vs. Direct Primary

Garagekeeper’s Liability Insurance can be a game changer.  Opening and running a profitable auto services business is not easy.

Like many other businesses, you have to be on top of your game every day.  An upset customer can turn on you at the drop of a hat and, with today’s internet resources, ruin your business by writing scathing online reviews.  How you choose to insure your Garagekeeper’s Liability can have a direct impact on how your customers perceive you and your company.  Enter Garagekeeper’s Liability Insurance.

Customers bring their vehicles to you and leave them in your care. They trust that you will care for them just like they will, and you more than likely do.  However, things happen.  As we all know, things happen. This is why any auto services related business should carry Garagekeeper’s Liability.  The questions are: what does it cover, and which type should I purchase?

Garagekeeper’s Liability Insurance Explained

Garagekeeper’s Liability Insurance  is meant to provide comprehensive and collision insurance coverage for customers’ autos that are left in your care, custody and control.  It doesn’t matter if you are a dealership, service shop, body shop or even a detailing facility.  If someone leaves their car with you, they are expecting you to use due care and they are expecting you to cover any damages that may happen on your watch.  One may think this is pretty cut and dry.  However, that is not always the case.  Whether or not a loss is covered comes down to the type of Garagekeeper’s Liability Insurance you purchase.  There are several types of Garagekeeper’s Liability Insurance available.  For purposes of this article, we will focus on the two most common:  Legal Liability and Direct Primary.

Legal Liability

Legal Liability is the cheaper of the two coverages.  Sounds great, right?  Not so fast.  While most of us love to save a buck, the fact of the matter is that in many cases, the cheapest insurance policy is actually the most expensive.  Legal Liability only pays out of you or one of your team members is legally liable for the damage done to a customer’s vehicle while it is in your care custody and control.  If legal liability can’t be proven, then the insurance company will deny the claim and your customer will be required to file the claim under their own policy.  How many customers are going to be happy about that?  The average person who has a negative experience tells at least 10 other people in person about that experience.  In today’s digital age, that number is a multiple.  People will not only leave a negative review online, they will go as far as doing a Facebook Live event right in front of your business with the logo showing in the background warning everyone in their digital sphere of influence not to patronize your shop.  Still sound like a great idea?  The good news is there is an alternative:  direct primary.

Direct Primary

Direct Primary Garagekeeper’s Liability pays for comprehensive and collision damage for a customer’s vehicle in your care, custody and control whether you are legally liable or not.  Their insurance doesn’t get involved at all. Your insurance pays as direct and primary.  This is a great way to keep a good rapport with your customers.  Do you really want to spend the time and energy necessary to argue with an angry customer about why your insurance won’t protect their vehicle when they left it with you?  Regardless of what the legal system says, in their mind it will always be your fault and it will have a negative impact on your business.  Direct Primary solves this issue.

While claims don’t happen often, how they are handled when they do happen is what people remember.  By having Direct Primary Garagekeeper’s Liability Insurance, your customers can have the peace of mind needed when they drop their vehicle off for service.  Does Direct Primary cost more?  Yes. However, it does not cost more than losing a loyal customer who goes and tells all of their friends in every mom’s group on the internet why they shouldn’t use your shop.  When shopping for your Garagekeeper’s Liability Insurance, consider more than the cost of the premium.  It’s not a lot of money to do the right thing.  In fact, it could end up saving you more than you pay in the long run.

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David Carothers

 Commercical Insuramce

Kyle Houck

Kyle Houck

 Commercial Insurance


Grayson Carothers

 Personal Insurance

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