GARAGEKEEPERS INSURANCE is a type of property coverage for damage to property in their care, custody and control, such as a physical storage location, or even a vehicle which is performing repossession services.
Most finance companies and banks require a minimum GarageKeepers limit per location in the event they store or secure a large amount of the bank’s collateral, i.e., vehicles. This coverage guards against a large event striking an entire lot, such as a tornado or severe hail, for instance, damaging the vehicles.
Below, learn more about GarageKeepers insurance, as well as Direct Primary versus Legal Liability coverage.
What is Direct Primary GarageKeepers Insurance?
Direct Primary Garagekeepers Insurance is an important requirement which refers to the idea that any piece of collateral, vehicle or property being stored is covered by the Repossession Agent’s policy on a direct basis and not an excess basis or “legal liability”.
For instance: If a vehicle is repossessed and stored on your lot, and somebody breaks in and steals the vehicle while it’s under your “care, custody, and control," despite the fact that your property was properly fenced, locked, etc., Direct Primary provides the coverage regardless of who was legally liable. You weren’t liable, but your insurance pays the claim regardless. This is a positive for maintaining repeat clients and customers.
Furthermore, without this, Legal Liability has to be determined, and Direct Primary is also a mandated type of coverage to be in compliance with most contracts.
What is Legal Liability GarageKeepers Coverage?
Using the above example, with Legal Liability GarageKeepers Coverage, the owner of the vehicle must submit the claim to his own insurance company. You weren’t liable, so your insurance doesn’t pay out. This will keep your premiums from being raised as one positive, but forces your client to deal with the claim and potential insurance increases as a result.
There are benefits and drawbacks to both Direct Primary and Legal Liability coverages for GarageKeepers.
Learn more by contacting us or requesting a quote below. We're happy to walk you through everything you need to know, and the requirements in your state.