12.4 Garage Coverage Form and Garagekeepers

The Garage Coverage Form (CA 00 05)

The Garage Coverage Form (CA 00 05) packages auto and general liability exposures for businesses in the automobile trade — dealers, repair shops, service stations, parking facilities, and storage garages. It combines, in a single contract, exposures that would otherwise require both a Business Auto policy and a Commercial General Liability policy.

The Garage Form provides three principal coverages:

• Garage liability (auto and other-than-auto) — bodily injury and property damage from garage operations and ownership/use of covered autos.
• Garagekeepers coverage — for customers' autos in the insured's care, custody, or control.
• Physical damage for the insured's own autos (e.g., a dealer's inventory).

Garagekeepers coverage and the three coverage triggers

Garagekeepers coverage protects a garage business against damage to a customer's auto left in its care, custody, or control. Because liability and bailee concepts intersect, the form offers three options:

Trap: under legal liability, a customer whose car burns in a fire the garage did not cause recovers nothing from the garage policy — the garage was not negligent. Direct coverage (primary or excess) pays regardless of fault.

Covered perils and a worked deductible example

Garagekeepers covers customers' autos for comprehensive (or specified causes of loss) and collision, similar to physical damage. Separate deductibles usually apply: one for each customer auto (per loss) and sometimes an aggregate per occurrence (e.g., a hailstorm hitting many cars).

Worked example: A hailstorm damages 4 customer cars on the lot. Damage totals are $3,000, $2,000, $1,500, and $1,000. The garagekeepers comprehensive deductible is $250 per auto with a $1,000 maximum per occurrence.

Total per-auto deductibles equal $1,000, which exactly meets the per-occurrence maximum. Insurer pays $7,500 total damage − $1,000 deductible = $6,500.

Garage vs. Auto Dealers form

For larger franchised dealers, ISO uses the Auto Dealers Coverage Form (CA 00 25), which broadens the garage concept and adds 'Auto Dealers — General Liability' style coverage. Smaller service/repair operations not selling autos often still use the Garage Form. Exams may also pair garage liability with a CGL when premises exposures (e.g., a customer slipping in the waiting room unrelated to autos) are involved — though the Garage Form's other-than-auto liability typically handles that.

Garage Liability vs. CGL and the Auto/Premises Split

The Garage Coverage Form combines two liability worlds. Garage operations - covered autos responds like business-auto liability for the dealership's vehicles, while garage operations - other than covered autos responds like a CGL for premises-and-operations and products-completed-operations exposures (a customer who slips on the showroom floor, or a faulty repair that causes an accident later). This is why a service station does not need both a Business Auto policy and a CGL — the Garage Form packages them.

Larger franchised dealers instead use the Auto Dealers Coverage Form (CA 00 25), which broadens the concept and adds dealer-specific general-liability features.

Garagekeepers Triggers and a Worked Deductible

Garagekeepers protects customers' autos in the insured's care, custody, or control and offers three triggers: legal liability (pays only if the garage is legally at fault), direct primary (pays for damage regardless of fault, primary over the customer's own coverage), and direct excess (pays regardless of fault but excess over the customer's coverage). A hailstorm damaging four customer cars by $3,000, $4,000, $2,500, and $5,500 under a $500 per-auto deductible pays $2,500 + $3,500 + $2,000 + $5,000 = $13,000, subject to any per-occurrence aggregate.

The exam tests recognizing which trigger pays when the customer was partly at fault and whether the per-auto or per-occurrence deductible applies.

Covered Autos, Symbols, and Dealers' Plates

The Garage Coverage Form uses its own symbol set adapted to the auto trade, distinguishing the dealer's owned autos, autos held for sale, and customers' autos. Liability for the dealer's operations and products is built in, and dealers' drive-away and demonstration uses are addressed. A dealership's inventory of vehicles for sale is insured for physical damage under a dealers physical damage / false-pretense form, separate from garagekeepers (which covers customers' cars left for service).

The exam tests separating inventory (dealer-owned stock) from customers' autos (bailment exposure) because each is insured by a different part of the program.

When Garagekeepers Pays Despite No Fault

The key exam point on garagekeepers is the trigger. Under legal liability, a customer whose car is damaged by a peril the garage did not negligently cause (a hailstorm) recovers nothing from the garage, so the customer turns to their own auto policy. Under direct primary coverage, the garage's policy pays for that hail damage regardless of fault and before the customer's own insurance. Under direct excess, the garage's policy pays only after the customer's coverage is exhausted. Customers prefer direct primary; garages pay more for it.

A stem describing a non-negligent loss tells you the trigger determines whether the garagekeepers coverage responds at all.