If you have a garage or dealership business in Kentucky, the reputation you and your company have built is on the line especially if you get this coverage wrong. There are several different insurance coverages you need to protect you and your business financially, but for the purpose of this video, were going to talk Garagekeepers Legal Liability vs Direct Primary Insurance.
One area of insurance we focus specifically on is insuring garage and dealership operations. From one man shops to large franchise dealerships, we’ve built insurance programs for each level of your business.
As we mentioned in one of our last videos, garagekeepers insurance is not cut and dry. Technically, there are three different options, but in most cases and for purposes of this post we’re only going to hit on the two main options: Garagekeepers Legal Liability vs Direct Primary Insurance.
What is Garagekeepers Legal Liability Insurance?
Legal liability coverage is typically the most common and cheaper of the two, but don’t get that confused and think that means it’s also the best option. Customers bring their cars to you to fix them because they trust you. Most likely they’ve heard you do good work, you’ve been referred to them by a friend, or they’ve used your services for years. They count on you to treat their car like it’s your own. Unfortunately, accidents do happen.
Garagekeepers liability is meant to provide what most car owners consider full coverage…meaning it provides comp and collision coverage for customers autos that are left in your possession. So your customers automatically assume that if damage occurs to their car when in your possession you are going to take care of it.
How it Impacts Your Customers (And Reputation)
Let’s say you have a customers car and you leave it locked inside your shop overnight. A thief breaks in and damages the car in the process. You did everything to protect the customers vehicle by parking it inside your locked garage overnight. It is for this reason you are not legally liable for the damage to the customers car.
So if you have legal liability coverage, your insurance will not be on the hook to fix the car. Sounds good to you right? No claim so your insurance won’t go up next year?
The only problem is instead the customer’s personal insurance will have to pay for the damage. How happy is that customer going to be when they find out they have to turn in a claim on their own insurance to fix their car? How quick do you think they will be to go on Facebook, tag your business, and rant to all their social media friends to never do business with you?
What is Garagekeepers Direct Primary Insurance?
Like we said earlier, your reputation is important and something you’ve worked hard to build up and maintain. The coverage option that is better than legal liability is Direct Primary. Direct Primary Garagekeepers’s Liability provides the same coverage as legal liability with one exception. That exception is the key difference between the two coverages. Direct Primary provides the coverage whether you are legally liable or not. Your customer’s insurance does not get involved. You don’t have to tell them to turn in a claim. They don’t rant negatively about you and your business on Facebook.
You don’t have the time to deal with trying to explain to an angry customer why your insurance won’t protect their vehicle and how they have to turn in their own claim. In their mind, if they leave their car with you then it’s your job to pay it.
Don’t opt for a cheaper insurance policy to save a few bucks on the front end. It’s like ordering a cheap, low-quality part to fix something. In most cases the cheapest insurance policy turns out to be the most expensive.
Next Steps
If you have a dealership or garage business in Kentucky, and have more questions about your insurance program give us a call or email me. Check out our other videos for our garage or dealership business. You can find them here on our website or our YouTube Channel.
We look forward to working with you.
