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In Michigan, motor vehicle dealers selling new or used cars must purchase liability insurance as well as a�$10,000 auto dealer bond. Learn more about garage liability insurance below, and request a quote from Single Source Insurance today.
Garage liability insurance is a specialized type of insurance designed specifically to meet the needs of auto dealerships that maintain their own repair facility. It combines certain features of general liability insurance and commercial auto insurance to provide coverage for damages to people or property arising from normal business operations.
Garage liability insurance covers bodily injuries to customers and other non-employees. These policies can be used to cover medical bills and court-ordered damages for injuries suffered by customers and third parties that occur on the dealer�s premises.
For example, an injury that occurs when a non-employee has a slip and fall accident in a dealer�s repair shop would be covered. Injuries to a third party struck by a dealer employee during a test drive would also be covered. Garage liability insurance also covers damage to dealer-owned vehicles.
Many people confuse �garage liability� with �garage keeper�s� policies. Note that garage keeper�s coverage is typically added as an endorsement to a garage liability policy. Its purpose is to provide coverage for customers� vehicles while they are in the custody, care, and control of a repair facility.
Garage keeper�s coverage is important, because damage to a vehicle that doesn�t belong to the dealer (i.e. a non-owned vehicle) would not be covered by a standard commercial auto insurance policy.
In Michigan, new and used car dealerships are licensed by the Department of State, Bureau of Driver and Vehicle Programs. To obtain a license, Class A and Class B dealers are required to maintain a registered repair facility on the premises or enter into a servicing agreement with a registered repair facility within ten miles of the dealership.
Dealers who choose to operate their own repair facility usually choose to purchase garage liability insurance voluntarily. The only mandatory insurance for Michigan auto dealerships is fleet-type no-fault auto insurance to cover either �all owned vehicles� or �any vehicle,� which includes vehicles owned by customers. This requirement can be met by purchasing a garage liability policy with a garage keeper�s endorsement.
The premium cost for garage liability policies is quoted on a case-by-case basis, depending on the options that the policy holder selects, including:
When considering whether to get this policy, one thing is for certain: garage owners pay less for liability insurance than they would potentially pay out in claims. An auto dealer could pay an annual premium of as little as a few hundred dollars or as much as a few thousand dollars, depending on the amounts and coverages involved.
You can rely on Single Source Insurance to get you the best deal possible on the insurance you need for your dealership. Request a quote today!
