12.4 Garage Coverage Form and Garagekeepers

The Garage / Auto Dealers Coverage Form

Businesses whose core operation is autos — dealerships, repair shops, body shops, service stations, parking garages, and storage lots — need a form that blends auto liability, premises/operations liability, and coverage for customers' vehicles in their care. ISO modernized the dealer market with the Auto Dealers Coverage Form (CA 00 25), which replaced the older Garage Coverage Form for franchised and used-car dealers. Non-dealer auto businesses (independent repair shops, parking lots, valet operations) still use a Garage Coverage Form structure.

The value of these forms is consolidation: a single contract combines what would otherwise require a Business Auto policy plus a Commercial General Liability policy plus a customers'-autos endorsement, with one set of limits and conditions.

The Three Liability Pieces

1. Garage Liability — Auto: covers BI/PD from the ownership, maintenance, or use of covered autos, much like BAP Section II — for example, a salesperson causing an accident on a test drive.
2. Garage Liability — Other Than Auto (Operations): covers premises and operations exposures — a customer slipping on a wet showroom floor — much like CGL bodily injury and property damage.
3. Products/Completed Operations (Garage Operations): covers faulty repair or service work after the vehicle leaves the shop, such as brakes that fail because they were installed incorrectly.

Garagekeepers Coverage

Garagekeepers is the critical add-on covering the dealer's or shop's liability for damage to a customer's auto left in its care, custody, or control for service, repair, storage, or parking. It can be written on one of three bases, and the chosen basis controls whether a no-fault claim is paid:

Garagekeepers responds to comprehensive, specified causes of loss, collision, or fire to the customer's vehicle, subject to a deductible and a per-location limit rather than a per-vehicle limit. A single fire or hailstorm that damages many customer cars is capped at the location limit.

Worked Example — Garagekeepers Basis

A customer's $30,000 car is stolen from a repair shop's lot. The shop carries Garagekeepers on a legal-liability basis with a $25,000 limit. If a court finds the shop was not negligent (a sophisticated theft, gates locked, alarm armed), the policy pays $0 — legal-liability coverage requires fault, and the customer must turn to their own auto comprehensive coverage.

Had the shop bought direct primary Garagekeepers, the insurer would pay up to the $25,000 limit regardless of fault, less the deductible (only $25,000, not the full $30,000, because the limit caps the recovery). This single distinction — fault required versus paid regardless of fault — is among the most heavily tested commercial-auto items.

The Care, Custody, or Control Trap

Standard auto and CGL policies exclude damage to property in the insured's care, custody, or control. Garagekeepers exists precisely to fill that gap for autos. It does not cover the garage's own autos (those use the BAP-style auto symbols), the personal contents left inside customers' vehicles, or theft committed by the garage's own employees unless specifically added.

Garage Liability vs. the BAP and CGL\n\nThe Garage and Auto Dealers forms exist because an auto-centered business has overlapping exposures that no single standard form covers. A dealership faces auto liability (a salesperson crashing on a test drive), premises liability (a customer slipping in the showroom), and products/completed-operations liability (a repair that fails after the car leaves). Buying a Business Auto policy plus a CGL would leave gaps and duplicate conditions; the Garage form consolidates all three into one contract with one set of limits, which is why auto businesses use it instead of separate monoline policies.

Symbols and Covered Autos on the Garage Form\n\nLike the Business Auto form, the Garage/Auto Dealers form uses covered-auto symbols to define which vehicles are insured, but the symbols are adapted to a dealer whose inventory constantly changes. A dealer chooses symbols that automatically cover all owned autos including newly acquired inventory so cars added to the lot are covered without individual reporting. The form also addresses furnished autos (demonstrators driven by salespeople) and the personal use of dealer plates, which is why Drive Other Car-style treatment for the dealer principals and named individuals is commonly endorsed onto the policy.

Worked Garagekeepers Comparison\n\nThe choice of Garagekeepers basis controls the outcome of a no-fault loss. Suppose hail damages ten customer cars parked on a repair shop lot, totaling $60,000, and the shop carries a $50,000 per-location Garagekeepers limit with a $500 deductible. On a legal-liability basis, if the shop was not negligent (the storm was unforeseeable), the policy pays $0 and customers turn to their own comprehensive coverage. On a direct primary basis, the insurer pays regardless of fault up to the $50,000 location limit (not the full $60,000), less the deductible. This single fault-versus-no-fault distinction is the most heavily tested garage item.