The Concerned Insured: Garagekeepers Liability Insurance

Insureds Needing Guidance

Concerned Insureds

Just today, one of our readers asked a great question about a situation they found themselves in recently.  They had posted it in our comments section, and I felt that a response to this question should be made more public than in a comment response.  User donaldduck (I love Donald Duck) asked this question:

“Dear Dgermain,
Just found out that Valvoline put in transmission fluid in my brake system instead of break fluid. Due to this mistake, every part that has come into contact with transmission fluid needs to be exchanged (apparently transmission fluid causes all the plastic/rubber parts to swell). Is there any form of insurance that covers mechanic screw-ups?”

And it is a fantastic question indeed donald (can I call you donald?)!  Some may think that because they have an auto policy, that they are covered from nearly any form of loss.  There are a few exclusions for an auto policy, but common types of losses are mostly covered by the policy.  But what happens when you leave your car with a mechanic and they damage your vehicle?  Will your auto policy cover those damages?  No.

Don’t Worry, The Good Part’s Coming

Wait, what?

It’s ok though!  Don’t fret, because there actually is coverage for this sort of thing, it’s just not covered under your policy.  The reason being that the mechanic has his own policy called a Garagekeepers Liability Insurance Policy.  This policy will cover damage to vehicles that are in their care, custody or control, and they do not need to have ownership for the coverage to apply.  Let’s say there is a fire on their premises and that fire happens to spread to your soft-top convertible, putting a large, unattractive hole in your roof.  Their insurance will cover that loss because your vehicle is in their care, custody and/or control.

In a garage keepers policy, the insured’s are the parties that will be held liable in the event of a loss.  So if a mechanic accidentally puts transmission fluid where brake fluid is supposed to go, not only should he have had that second cup of coffee, but the damage to the vehicle will be covered under the mechanic’s garage keepers policy.

Much Thanks Donald!

So you see, just because a loss isn’t covered under one policy, doesn’t mean that it is not covered under another.  This is why flood is excluded from a homeowners policy, because flood insurance can only be offered through the Federal Government.  So, donaldduck, I hope this answers your question.  My advice would be to speak to the mechanic and tell them exactly what you’ve told me.  Make sure they put in a claim for the damages, and their insurance company will help with the rest.

Thank you very much for your question, it’s always fun writing about something that someone actually needs help with.  And tell your friends that if they have any questions, to let us know and we’ll do our best to answer them

And for you Donald, stay classy: