When Do You Need Garagekeepers Insurance vs. Dealership Liability Insurance?
Garagekeepers Insurance covers customer vehicles in repair; Dealership Liability Insurance protects dealership inventory cars.
Commercial dealership insurance can be confusing when first researching the types of coverages you may need. Some sound similar to others just by their name. Others, on the surface, may seem to overlap in some areas to others.
For example, dealerships will often confuse Garagekeepers Insurance with Dealership Liability Insurance. They may seem similar but there are key differences.
While both types of coverage are important for dealers, new and used, understanding the nuances between them are important.
Let’s break down the difference between Garagekeepers and Dealer Liability Insurance…
Garagekeepers Insurance: Safeguarding Vehicles in Your Care
Imagine your dealership has a service lane on the premises. It’s busy everyday and has customer vehicles coming in and out from open to close. At any given time, you have 10-20 vehicles on the lifts or parked outside the lane at any given time.
This is where you need Garagekeepers Insurance.
It acts as a way to protect your customers' cars while they are in your temporary possession while performing repair or maintenance. Independent repair facilities will have this insurance in place but so should dealers who have a service lane.
If a tech takes the car off the lift and hits another car while parking it for pick up later in the day, this protection will cover the damages to the customer’s vehicle. Your dealership will not have to pick up the tab for those repairs.
The two specific types of Garagekeepers Insurance are direct primary and legal liability.
Direct primary it doesn’t matter if the damage is the dealership’s fault or someone else’s that may have hit the car on the lot…this coverage will handle it for you. Think a tech driving the car out of the service lane and it collides with another car driven by another customer.
Legal liability will only provide coverage if your dealership is found at fault and therefore legally responsible for the damage.
One is more all-encompassing while the other is in effect only if your dealership is found to be at fault.
While it may be a little more expensive, direct primary Garagekeepers Insurance may be the way to go for a more worry-free way to protect the dealership. Making the repair of a customer’s damaged vehicle as fast as possible buys a lot of goodwill when they are upset about having something happen to their car while it was on your lot.
Dealership Liability Insurance: Protecting Your Cars
Dealership Liability Insurance is not focused on the cars you’re fixing…it’s there to protect the cars you’re selling.
Your dealership needs protection from the risks associated with test drives when a customer is behind the wheel of your car. Imagine a test drive going wrong and the customer hits another vehicle. Dealership Liability Insurance will cover any bodily injury or property damage claims that result from the accident.
Another scenario could be an accident that occurs with a customer shuttle vehicle while picking up or dropping off a customer who may have a car in the service lane. This insurance would kick in here, too.
Comparing the Two
The main difference between the two comes down to what exactly is being protected.
Garagekeepers Insurance shields the vehicles that are being repaired in your service lane or that you’re storing while waiting for repair completion from damages from anything ranging from a collision, fire, theft, or vandalism.
Cars can be in your care for a week or more waiting on a part…this coverage will handle anything that happens to that car while it’s parked at your business.
Dealership Liability Insurance covers your business when damages happen to the cars you have in inventory as a result of customer interactions, test drives, or other operation.
Ideally, if you are a dealership with a service lane, you want BOTH for maximum protection from liability.
And DealerSure can help you find the best deal on both Garagekeepers and Dealership Liability Insurance. We make the process as easy and fast as possible.
If you already have coverage for your dealership that may include either of these protections, let us do a side-by-side cost comparison to see how we can save you money while improving the protection for your dealership. Reach out here and let us see how we can help!