THE GARAGE LIABILITY POLICY ON YOUR GENERAL AUTO INSURANCE QUOTE

Does you general auto insurance quote includes garage likably coverage?

The typical automobile sales agency and repair shop (hereafter referred to simply as garage) has exposures and needs that are not easily met by the Basic Automobile Policy. A list of automobiles that such a risk owns, maintains, or uses would include:
(l) new automobiles for sale;
(2) new automobiles as demonstrators;
(3) used cars for sale;
(4) service cars;
(5) customers’ cars for repairs and servicing; and
(6) cars owned by members of the firm, salesmen, mechanics, and others. An accident arising out of the use of any of these automobiles might involve the garage in a serious liability loss.

The BAP, as we have seen, is essentially a specified car contract; as such, general auto insurance quote covers only the automobiles described in the declarations and replacements thereof. Additional automobiles, acquired after the inception of the policy, are covered only if the company is notified of their acquisition. For most non-owned automobiles, no coverage is granted at all. In view of the frequent turnover in owned automobiles and the large exposure to loss from non-owned automobiles, the inadequacy of the BAP in meeting the needs of garages is therefore apparent.
Other weaknesses are as follows: 1. So many non-owned automobiles and so many changes in owned automobiles are involved in the course of a year that it would be difficult to measure exposures and assess premium charges in terms of automobiles, the usual rating basis applicable to the BAP.

2. A garage is a bailee with respect to customers’ automobiles in its charge and is therefore liable for damage and loss concerning which it cannot prove freedom from negligence. Furthermore, as we have seen, any physical damage insurance owned by the customer and under which he might be reimbursed cannot “inure directly or indirectly to the benefit of any bailee for hire liable for loss to the automobile.” That is, even though the customer’s loss has been paid under his own FAP, the garage is still subject to liability through subrogation proceedings. In view of the usual exclusion of damage to property in charge of the insured, the BAP (unendorsed) offers no protection to the garage against bailee liability. Get general auto insurance quotes Today!

3. It is usual for most business risks to cover automobile liability on an automobile policy and all other liability exposures (except employers’ liability and workmen’s compensation) on a separate general liability policy. While this division of coverage is satisfactory when most of the automobile exposure is developed off premises, it is undesirable in the case of garage risks. With them the automobile and premises exposures are so closely interwoven that it would frequently be difficult to tell whether liability losses arising out of the use of automobiles and automotive equipment should be covered under the automobile policy or under the premises, operations, product, or elevator sections of the general liability policy. To eliminate delay and confusion in the adjustment of claims, it is therefore preferable, with garage risks, to have all liability coverages consolidated in one policy issued by a single insurer. This, of course, is not possible under the BAP.

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