...what you always wanted
to know about insurance in Pennsylvania...
Who is insuring my car
while its at the Repair Shop?
By Mark Sammarone (Licensed Agent/Broker)
This is an important question which many people fail to ask. We
hand over our cars worth thousands of dollars to mechanics every year without
really knowing the answer to the question: "What happens if someone
or something wrecks my car while in the hands of my mechanic?." Many
garages purchase a type of insurance called Garage-Keepers Legal Liability
to cover this exposure, however some do not. Also, those repair shops that
do purchase this coverage may only buy partial coverage. Here is what can
happen in the event your car is damaged while in the hands of your mechanic:
If the repair shop fails to purchase a Garage-Keepers Legal Liability
policy, and the mechanic has an accident while driving your car, it will
be your personal auto policy that will end up paying for the damage.
However, your policy will only cover the damage to your car if you have
Physical Damage (Comprehensive and Collision) coverage included on your
policy and if there are no other restrictions on your policy such as no
coverage for unlisted drivers. The bad news here is that you will still
be responsible for your deductible as well as any penalty or surcharge
your insurance company might normally apply as the result of an accident.
Again, if the vehicle is damaged by a fire or other type of disaster while
in the mechanics shop, and the Garage failed to buy the proper coverage,
your personal automobile policy will more than likely respond under the
Physical Damage section of your policy. Yes, the mechanic and/or the garage
can be sued for your damage, but there is a good chance that if they failed
to buy the coverage to begin with, it is more than likely that they are
unable to afford replacing your car.
What if the garage owner buys Garage-Keepers legal liability, but
it is not complete coverage. Garage owners have the option of buying the
Garage Keepers Legal Liability coverage one of two ways. They can buy "primary"
coverage that will be first to pay in the event of an accident, or "secondary"
coverage where your personal automobile policy would need to pay first
and the garage owner's policy would pay second. Needless to say, having
your personal auto insurance policy involved is not desirable since you
can be subject to penalties and/or surcharges as the result of an accident
by a permitted driver (the mechanic).
What can I do about this situation?
The best option is to deal with a reputable repair shop that buys
adequate limits on a Garage Keepers Legal Liability policy with "primary"
coverage. There are many shops out there that are properly insured. In
the event the mechanic has an accident while driving your car (e.g. during
a test drive) it will be the garage’s policy that will be first in line
to pay, thus leaving your personal auto policy unaffected.
How do you know if the garage has the right insurance coverage?
Ask! If this is a garage which you often frequent, or in which you are
planning to spend a lot of money, you are well within your rights to ask
for a Certificate of Insurance. The Certificate of Insurance normally does
not cost the garage keeper anything. All it takes, usually, is one call
from the garage owner to his insurance agent, and this certificate provides
you with:
1. Evidence of insurance.
2. Shows the limits on the policy (does he have enough coverage).
3. Notification rights if the policy is cancelled.
The purchase price for new cars is rising each year and no matter
what kind of car you have you have it's an investment worth protecting!
If you have an insurance question,
or to suggest a topic that you would like to see listed, please send an
e-mail message to insure@ccil.org.
