12.4 Garage Coverage Form and Garagekeepers

The Garage Coverage Form (CA 00 05)

Auto dealers, repair shops, service stations, parking facilities, and storage garages have a hybrid exposure: they have an auto liability exposure (test-driving customer cars, lot operations) and a premises/operations and products liability exposure (the building, tools, completed repair work). The Garage Coverage Form (CA 00 05) bundles these into one form so the insured does not need both a BACF and a CGL.

The form provides three core coverages:

• Garage Liability — combines auto liability and general (premises/operations + products-completed-operations) liability for the garage business.
• Garagekeepers Coverage — for damage to customers' autos left in the insured's care, custody, or control.
• Physical Damage — for the insured's own autos (dealer inventory, service vehicles).

Garagekeepers Coverage — The Key Distinction

Garagekeepers is the part most tested. It responds to loss of a customer's vehicle while in the insured's possession for service, repair, storage, or parking. It is written on one of three bases that control when the insured's policy pays:

Covered causes mirror auto physical damage: Comprehensive (or Specified Causes of Loss) and Collision, each subject to a per-auto deductible and a per-event maximum.

Worked example — Direct Excess. A customer's $25,000 car is damaged by fire while parked at the repair shop, not due to the shop's negligence. The customer carries personal Comprehensive with a $500 deductible. On a Legal Liability basis the shop's policy pays nothing (no negligence). On a Direct Excess basis, the customer's own insurer pays first ($25,000 − $500 = $24,500); the garagekeepers policy then covers the customer's $500 deductible (subject to the garagekeepers deductible). On a Direct Primary basis, the garagekeepers policy pays first: $25,000 − its own deductible.

Exclusions and Traps

• Defective parts/faulty work is excluded under products-completed-operations carve-outs for the cost to redo the work (but resulting damage may be covered).
• Liability assumed by contract beyond the insured's legal duty is generally excluded.
• A trap: Garagekeepers covers the customer's auto; physical damage on the form covers the dealer's own autos. Don't confuse the two on the exam.
• The Garage Form has largely been split by ISO into the Auto Dealers Coverage Form (CA 00 25) for franchised/used dealers, while the Garage Form is used for non-dealer operations (repair shops, parking).

The Garage Coverage Form and Whom It Serves

The Garage Coverage Form (CA 00 05) is designed for auto-business risks, auto dealers, repair shops, service stations, parking operations, and similar enterprises, where the CGL auto exclusion and the standard Business Auto form leave gaps. It combines auto and general liability for the garage operation into one form, covering both the insured's liability arising from owned and operated autos and the premises/operations and products liability of the garage business, which a standard CGL would exclude as auto exposure.

Garagekeepers Coverage: The Key Distinction

Garagekeepers coverage is the feature most tested. It covers the garage's legal liability for damage to customers' autos left in its care, custody, or control, an exposure the CGL care-custody-control exclusion otherwise removes. It can be written on three bases: legal liability (pays only if the garage is legally responsible for the damage), direct primary (pays for damage to the customer's auto regardless of the garage's fault, primary over the customer's own coverage), and direct excess (pays regardless of fault but only excess over the customer's coverage). The basis chosen dramatically changes when the coverage pays.

Garagekeepers Bases Worked Through

Suppose a customer's car is damaged by hail while parked at a repair shop. Under legal-liability garagekeepers, the shop pays only if it was negligent (it was not, so no payment, and the customer turns to their own comprehensive coverage). Under direct-primary garagekeepers, the shop's insurer pays for the hail damage regardless of fault, ahead of the customer's policy. Under direct-excess, the shop's insurer pays only after the customer's own coverage is exhausted. Recognizing how fault and primacy differ across the three bases is exactly what the exam tests.

Exclusions and Garage Traps

The Garage form excludes damage to the insured's own autos held for sale (covered instead by dealers physical damage coverage such as the auto dealers form or a separate inventory policy), defective-work product exposures, and certain pollution. A common trap involves a dealer assuming garagekeepers covers its own inventory; it does not, because garagekeepers covers customers' autos, while the dealer's own stock needs dealers physical damage coverage.

Another trap tests whether the garage's premises and products liability (a customer slipping in the showroom, or a faulty repair causing an accident) is covered, which the Garage form addresses but a Business Auto form would not.

Coordinating Garage Coverage With Dealers Physical Damage

Auto dealers face two distinct property exposures the exam separates: customers vehicles in their care (covered by garagekeepers) and their own inventory held for sale (covered by dealers physical damage, not garagekeepers).

A dealer that buys only garagekeepers and assumes its own lot inventory is protected has a serious gap; a hailstorm damaging the dealer's unsold cars is paid under dealers physical damage, while the same storm damaging a customer's car left for service is paid under garagekeepers. Recognizing that the two coverages address different owners of the damaged vehicles is the recurring trap, so always ask whose vehicle was damaged before naming the coverage.