Garagekeepers Point of View: What’s the Difference Between Direct Excess and Direct Primary?

As a garage or auto body shop owner, one of the most difficult tasks we are faced is developing a relationship of complete trust with each and every client. To most people, their vehicle is an integral part of their everyday life – whether it’s a quick trip down the block for a carton of eggs, or a cross country excursion – our customers depend on us to protect their autos; allowing for them to maintain their quality of life. But who’s protecting you?

No matter what type of venue you own, whether you are a standard auto dealer, body repair shop, detailer, service station, storage garage, etc. you’ll find that your commercial general liability and business auto liability insurance are heavily blended together – making it difficult from time to time to decipher how to handle particular claims.

Depending on the incident, whether your garage was found negligent, and any other outside factors, how your insurance applies to the loss will vary. Most importantly, how the claim is handled will also be affected by the garage insurance option you chose. Remember, in our earlier series of garage liability posts, we explained the variations of coverage: legal liability, direct primary and direct excess. Let’s now put those forms of coverage into action:

Garagekeepers Direct Excess Insurance: will pay for damages to a client’s vehicle that the business bears NO legal liability for. This means that the customer must report the loss to their own insurance carrier and have them pay for the damages. Their deductible will be reimbursed by your venue’s garagekeepers insurance. However, if your business is found legally liable, coverage applies on a primary basis.

Garagekeepers Direct Primary Insurance: will pay for any damages incurred while a client’s vehicle is in the custody of your business. This means that the client does not have to involve their own insurance carrier in the claim or repair of resulting damages.

Here’s how a claim, between these two different types of insurance, could potentially be handled:

A client leaves their vehicle at your shop for repair. Due to an influx in business, you have limited indoor parking, causing you to move the client’s vehicle to curbside parking during the course of repair. While it is parked on the street, a careless motorist damages the entire left side of the vehicle while driving down the street. As a garage owner, you are not legally liable in this case – you didn’t cause the damage and were not negligent in the safety of the vehicle. Overall, the car was parked properly, yet it was unattended at the time of the crash.

If your garage is insured under garagekeepers direct excess insurance, the client will be notified immediately of the accident and must report it to their own insurance carrier. It will be considered a no fault loss since the client’s vehicle was unattended, but the customer will need to actively be involved in the claim process and repair.

If the shop is insured under garagekeepers direct primary insurance, the client may not even be notified that a accident or damage has occurred. Your shop’s garagekeepers direct primary insurance will handle the claim and repairs entirely.

Overall, the main reason a shop would consider choosing garagekeepers direct primary insurance is because of this idea of building and maintaining positive relationship with each client. By taking on the responsibility and initiative to protect a client’s vehicle to the fullest extent, you are showing that your venue cares about their well being – as well as your reputation.

Interested in learning more about Garagekeepers Legal Liability? Contact the coverage experts at Wolpert Insurance to discover your specialized commercial insurance options today!