12.4 Garage Coverage Form and Garagekeepers

The Garage Coverage Form

The Garage Coverage Form (CA 00 05) is a hybrid form for auto-related businesses — franchised and used-car dealers, service stations, repair shops, and parking operations. It blends auto liability, general liability, garagekeepers, and physical damage into one form, which is why exams treat it as a special case.

A dealer's exposure differs from an ordinary business: it has a fluctuating inventory of autos held for sale, customers' autos in its care for repair, and premises/operations liability. The Garage form addresses all three, where a BACF plus CGL would leave gaps.

Garage Liability vs. Garagekeepers

Two distinct liability pieces appear on the form:

• Garage Liability — covers BI and PD arising from garage operations, including ownership/use of covered autos and the products-completed-operations and premises exposures of the business. It protects the dealer against the public.
• Garagekeepers Coverage — covers the dealer's legal liability for damage to a customer's auto left in its care, custody, or control for service, repair, storage, or parking.

Trap: Garage liability covers harm the dealer does to others; garagekeepers covers damage to customers' vehicles in the dealer's custody. Students confuse the two constantly.

Garagekeepers Coverage Options

Garagekeepers can be written three ways, controlling when the insurer pays:

Direct coverage is broader because it pays even when the dealer is not at fault (e.g., fire or vandalism in the lot), preserving customer goodwill. Direct Excess is cheaper because the customer's own insurer pays first.

Garagekeepers Limit — Worked Example

A repair shop carries $100,000 Garagekeepers on a per-location basis with a $250 deductible per customer auto for direct coverage. A fire damages three customer cars: $40,000, $35,000, and $50,000 = $125,000 total.

• Apply deductible per auto under direct coverage: ($40,000 − $250) + ($35,000 − $250) + ($50,000 − $250) = $39,750 + $34,750 + $49,750 = $124,250
• The per-location limit caps payment at $100,000
• Insurer pays $100,000; the shop absorbs the remainder.

Trap: The garagekeepers limit applies per location, per loss, not per vehicle. A single fire damaging many cars can exhaust the limit quickly.

CA 00 05 Coverage Structure

The Garage Coverage Form bundles three exposures a typical auto dealer or repair shop faces: garage liability (premises and operations plus auto liability for the dealer's own vehicles), garagekeepers (damage to customers' autos in the insured's care), and an optional dealers' physical damage / false-pickup grant for the dealer's own inventory.

A key distinction the exam tests: garage liability responds to third-party bodily injury and property damage the business causes (a customer slips on the lot, or a test-driver hits a pedestrian), while garagekeepers responds to damage to the customer's vehicle itself while it is left for service, storage, or parking. The two are easy to confuse because both involve customers and cars.

Garagekeepers Triggers — Side-by-Side

Garagekeepers can be written on three coverage triggers, and the exam loves a fact pattern that turns on which one applies:

Example: hail damages ten customer cars on a shop's lot and the shop was not negligent. Under legal-liability garagekeepers the insurer pays nothing (no fault). Under direct coverage it pays for the hail damage. If the shop chose direct-excess, the insurer pays only what exceeds each customer's own comprehensive coverage — a frequent multi-step exam calculation.

Auto Dealers Coverage Form and Exam Strategy

ISO has largely replaced the Garage Coverage Form with the Auto Dealers Coverage Form (CA 00 25) for franchised and independent dealers, consolidating garage liability, garagekeepers, dealers' physical damage, and broadened general-liability exposures into one part. Repair shops, parking operations, and service-only risks that are not dealers still use the Garage Coverage Form.

For the exam, decide first whether the risk is a dealer (sells vehicles — Auto Dealers form) or a non-dealer service/parking risk (Garage form). Then separate the liability question from the property question: if a third party is hurt or a third party's other property is damaged, it is garage liability; if a customer's car left in the insured's care is damaged, it is garagekeepers, and the trigger (legal-liability, direct primary, or direct excess) decides whether fault matters. Working those two forks in order resolves nearly every garage question.

Fault-vs-No-Fault Recap

When a garage question hinges on hail, fire, theft, or another no-fault peril damaging customers' cars, the answer almost always turns on the garagekeepers trigger: legal-liability pays nothing without negligence, while direct (primary or excess) pays regardless of fault. Reading the trigger named in the declarations before computing any number prevents the most common garagekeepers error.