Garage Liability and Your Automobile Coverages

Automobiles Coverage – General Auto Insurance Rates

The scope of this coverage may be indicated by several typical situations in which accidents can occur:
• a tow car hauling a wreck into the garage;
• a mechanic using his own car to pick up supplies for the garage or to answer a call for road service;
• the demonstrating of new or used cars to prospective buyers;
• garage employee driving a customer’s car for pick-up or delivery or for road- testing.
In all four examples, owned or non-owned cars are being used in connection with the garage operations, and hence, if an accident occurred in which a third party was injured in person or property, the GLP would cover.
Coverage is also provided under Division 1 on certain automobiles even though they are not used in connection with garage operations.

The policy covers:
• the occasional use for other business purposes, and
• the use for non-business purposes of
• any automobile owned by or in charge of the named insured and used principally in the above defined operations.
Examples: While a prospect is in the garage examining a new model he gets into a conversation with the dealer about some real estate that the latter is developing. It is decided to drive out in one of the dealer’s cars to look at the lots under discussion. En route, a third party is injured. Even though the transaction has been changed from a garage purpose to an “other business” purpose the sale of real estate the GLP would cover.

Three qualifications have been met:
• the other business was only occasional
• the automobile was owned by the garage
As another example, mention might be made of the frequent practice of putting dealer plates on a car owned or held for sale by a garage and then using it for non-business purposes (i.e., pleasure). Such use is not restricted by the term “occasional.”
For the same incidental other business and regular pleasure purposes the GLP also covers any automobile owned by the named insured in connection with the above defined operations for the use of the named insured, a partner therein, an executive officer thereof, or a member of the household of any such person.

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In the preceding category of covered automobiles we had owned cars “used principally in the above defined [garage] operations.” In this second category coverage is granted to the principal members of the firm and to their families for the regular pleasure use of cars owned by the named insured. That is, it is not necessary for the enumerated principals to buy an FAP on family cars if they register them in the name of the garage.
Any automobile which is being used by the named insured or with his permission, if insurance for such use is afforded under coverage A.
As we have seen, Division 1, in addition to covering non-owned automobiles, provides the broad owned automobile coverage required by automobile sales agencies. Other garage risks (storage garages, public parking places, service stations, and repair shops), which have very limited owned automobile exposures, may purchase the less expensive Division 2 in lieu of Division l. It covers premises and operations just as Division 1 does, but as to automobiles it is restricted to the use in connection with the above defined operations of any automobile not owned or hired by the named insured, a partner therein or a member of the household of any such person, general auto insurance rates.
With respect to Division 3, the GLP covers any liability arising out of “the ownership, maintenance or use of elevators at the premises.”

This would include accidents involving the elevator itself or its shaft, cables, power equipment, and machinery. “Elevator” has the usual meaning associated with the term. It does not mean servicing hoists. Accidents involving the latter would be covered under premises and operations. As with elevator liability insurance generally, the usual property damage liability exclusion of “property in charge of or transported by the insured” does not apply.

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