Garage Keepers and On-Hook Towing Coverage

By: Mary Thompson, Capstone Brokerage President, March 25, 2016

Garage Keeper’s liability coverage is an optional but recommended insurance coverage for business owners that store customer’s vehicles. It is specifically beneficial to have for a business that provides either towing service or parking service. Basically, a garage keeper’s liability policy will protect the customer’s vehicle while their automobile is stored for parking, during maintenance or for general storage needs.

What does a Garage Keepers Liability Policy cover?

Garage Keeper’s Liability coverage provides protection when a vehicle is damaged by fire, theft, vandalism or collision while in the care of a business.

What type of business should have Garage Keepers Coverage?

For any business that provides a parking service, it is imperative to have a garage keeper’s insurance policy. Examples would include restaurants or establishments that provide valet service, towing companies and auto mechanics. Basically, if your business parks, drives or transports automobiles, a garage keeps policy should be considered.

Just like any other type of insurance policy, the purchaser will need to determine the coverage limits that they need. When making the decision, it is always smart to talk to your insurance broker to ensure the coverage amount is accurate for the businesses needs. There are a variety of options; the typical amount is $2500 per occurrence. Also, there is a deductible (as with most insurance policies) that can also be chosen based on the business’s desire.

Examples when a Garage Keepers Liability Coverage would be needed.
– A car is broken into while being stowed in a tow yard; the Garage Keeper’s policy would cover the vehicle up to the policies limit.

– A car is being parked at a restaurant’s valet and the valet driver hits something in the garage while parking the vehicle. The garage keeps policy would help pay for the repairs needed on the vehicle up to the coverage amount.

What are other requirements to obtain a Garage Keepers Policy?

In addition to a Garage Keeper’s policy, it may also be required to have a liability policy in place. If you are a towing company you may also need to have what is called On-Hook Towing Insurance.

What is On-Hook Towing Insurance?

On-Hook Towing coverage is a type of insurance policy that will protect the towing business in the event that there is damage or vandalism while the car is being towed. Basically, On-hook Towing insurance is self explanatory; the coverage is needed to protect vehicles owned by someone else during the actual towing process while the vehicle is hooked.

Example when an On-Hook Towing Policy would be used?

A towing company is called to pick up a vehicle that will not start. In route the tow truck has to make a stop for gas and the towed car is damaged when pulling into the gas station by not correctly gauging the turn. In this case, the on-hook coverage would be used to help pay to repair the customer’s vehicle.

Many businesses here in Las Vegas offer Valet parking as a perk for visiting their business. Restaurants, shopping malls, and even hospitals have a service to park cars, and all of these businesses should consider having additional coverage in the form of Garage Keeper’s liability. If you feel your business needs either a Garage Keeper’s Liability policy or On-Hook Towing insurance, be sure to speak with your insurance broker to help assist in selecting the best coverage for your insurance needs.