Tow truck drivers work day and night. Emphasis on the night part. Why is it that flat tires, breakdowns, and accidents always happen at night? Anyways, the point is that sometimes you might have to rescue a car and its driver when it’s late. That’s where garagekeepers insurance can come into play. We’ll go over the definition of garagekeepers insurance and explain why it can help your business.
Imagine this: It’s 3 am and one of your drivers gets a call to tow a car that’s broken down. They locate the car (and driver) and make arrangements to bring the car back to your shop for the night, because what auto shop is open at 3 am? The driver is very grateful that you’re going to keep their car for them, and they arrange for a ride home.
So by the time the driver gets the car to your lot, it’s about 3:45 in the morning. They lock up and go home for the night.
Fast-forward to 4:30 am. There’s a fire. Oh, now that’s just great.
Garagekeepers insurance definition:
Garagekeepers is a tow truck insurance coverage. The above scenario is one in which garagekeepers insurance comes in handy. Garagekeepers is for any business that’s required to hold onto customer cars for any reason, such as a towing business that brings a car to its premises while they wait for the mechanic’s shop to open.
Basically what garagekeepers does is protects the customer’s car while it’s in your business’s care, custody, and control. The reason could be for parking, maintenance, or storage – it’s not just towing businesses that can benefit from it. Garagekeepers insurance covers fire, theft, vandalism, explosions, and even lighting. So, if a scenario like the above happened, you’d be covered. Which would hopefully help you smooth things over with the owner of the vehicle, who’s understandably cranky and tired from their unintended late-night car mishap.
What kind of deductibles and coverage are we talking?
The deductible and limits of coverage you’re going to be looking at depend on the number of cars that are in your care at any given time, and the average value of these care.
To get a general idea of the limit of coverage you need, take the average number of cars in your shop at any given time and multiply it by the average value of those cars. For example, if the average value is $25,000 and you have 8 cars in your care on a regular basis, you’d need a limit of at least $200,000. The limit of coverage that you need will impact the cost of tow truck insurance.
(As far as deductibles are concerned, you’ll likely have to choose a per-vehicle deductible.)
Keep in mind that there are different types of garagekeepers insurance.
Because things have to be complicated, there are two different types of garagekeepers that you can choose.
Direct primary coverage – This type of coverage can protect the business as a whole even if the loss isn’t the business’s fault and they are not legally liable.
Excess coverage – This can provide extra coverage over the coverage that the vehicle owner has from their own auto insurance. It can pay if the vehicle owner doesn’t have insurance.
Are there any exclusions?
It’s always a good idea to examine the exclusions in any insurance policy. As far as garagekeepers is concerned, there are a few that you should know about. Garagekeepers insurance will not cover the following:
- Contractual obligations
- Theft by the insured
- Defective parts
- Faulty work
- Sound reproducing equipment unless it’s permanently installed in the vehicle
- Sound receiving equipment, such as mobile radios or phones, unless they are installed in the dashboard or console
- Radar detection equipment
When you’re taking care of someone else’s car, you’ve got lots of responsibility on your plate. Cars are expensive. And most people are pretty protective of their rides. But, as you know from being in the towing industry, anything can happen. When you think you’ve seen it all, something else happens. So make sure that your customers’ cars are protected while they’re on your property with a garagekeepers policy.
If you need insurance for your tow truck business, we can help! We know our tow trucks, and we’ll help you get the coverage you need. Just give us a call or fill out our quote form and we’ll get you three free quotes on your insurance.