Garagekeepers – The Forgotten Coverage

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By Paul Z. Martin, CIC, CPCU
By Paul Z. Martin, CIC, CPCU

Paul works with industry professionals to deliver high quality insurance content and education for the Academy. During his career, Paul worked as a multi-lines adjuster handling everything from workers compensation claims, to car accidents, to oil well blow outs. He was an underwriter, working on heavy commercial accounts across the Southeastern U.S. He was a special agent connecting with hundreds of agencies. He was a company manager at a start-up insurer, and was an independent agency partner in Jackson, Mississippi.

At The National Alliance for Insurance Education & Research, we are committed to providing professionals in the risk management and insurance industry with the tools and knowledge they need to succeed. Recently, we conducted a no-cost PRO Ed. 1-hour Webinar on a topic that is often overlooked – Garagekeepers Coverage. The overwhelming response and engagement from participants made us ponder why this particular coverage generated such interest.

The Garagekeepers coverage is rarely taught in the industry, leaving professionals unaware of its existence within the ISO commercial auto program. 

We wanted to address this knowledge gap by offering a free webinar that covered the basics of Garagekeepers coverage and how it works, here are some of the basics of covered in the session.

What is Garagekeepers Coverage?

Garagekeepers is a coverage endorsement that has remained virtually unchanged for decades, and it is an integral part of the ISO Commercial Auto division. This endorsement provides coverage for damage to customers’ autos while they are in the care, custody, or control of the insured. It functions similarly to physical damage coverage on the Business Auto Policy.

Insured individuals or businesses can select a coverage limit that applies to customers’ autos for comprehensive or specified causes of loss, as well as collision per location. Deductibles may apply per auto and for all losses resulting from a single event. Additionally, the coverage endorsement can be extended to watercraft through a separate endorsement.

Who Can Benefit from Garagekeeper Coverage?

This coverage is appropriate for any insured individual or business that has possession or control of customers’ autos or watercraft. It is particularly relevant for auto service businesses and other enterprises that take temporary control of customers’ vehicles. Even establishments that offer valet services can benefit from this coverage. 

Surprisingly, businesses that work peripherally with cars, such as windshield repair or car wash businesses, can also find value in Garagekeepers coverage.

Understanding the “Excess” and “Primary” Options

One aspect of the Garagekeepers endorsement that often leads to confusion is the option to select coverage on either an “Excess” or “Primary” basis. 

Unfortunately, the labels can be misleading. To clarify the decision, one can reframe it as follows: “Do you want the coverage to respond only when you are legally liable for the damage, or should it respond simply because the damage occurred while the vehicle was in your care?” 

This distinction is crucial when determining the extent of coverage in different scenarios.

Unexpected Applications of Garagekeepers Coverage

The Garagekeepers endorsement can occasionally be attached to a Commercial General Liability policy, depending on the specific carrier and their filing usage. This extension allows businesses without traditional auto exposure, such as restaurants or clubs, to offer a valet service for their customers or members. It’s essential to be aware of this variation and ensure proper coverage.

In conclusion, Garagekeepers coverage is a vital but often overlooked aspect of the insurance industry.

By providing knowledge and resources like this topic, we aim to bridge the gap and ensure that professionals have the information they need to protect their clients’ assets. 

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