12.4 Garage Coverage Form and Garagekeepers

The Garage Coverage Form

The Garage Coverage Form (CA 00 05) is designed for businesses in the auto trade — franchised and used-car dealers, service stations, repair shops, body shops, and parking operations. These risks have overlapping exposures that no single standard form addresses, so the Garage form packages them:

• Garage Liability — covers BI/PD from garage operations, including the ownership, maintenance, or use of covered autos AND the general premises/operations exposure (a customer slipping in the showroom).
• Garagekeepers — the insured's liability for damage to CUSTOMERS' autos in its care.
• Physical Damage — for the dealer's own autos and inventory.

Because the Commercial General Liability (CGL) excludes autos, the Garage form's liability section fills the auto-liability gap that the CGL leaves open for auto-trade businesses.

Note that ISO also offers the Auto Dealers Coverage Form (CA 00 25), a more modern packaging that combines dealers' auto liability, general liability, and garagekeepers into one form for franchised and independent dealers. The classic Garage Coverage Form (CA 00 05) remains the form most exam questions reference, so learn its structure first.

Garagekeepers Coverage — The Bailee Exposure

When a customer leaves a car for an oil change, the shop has care, custody, or control (CCC) of that auto. If the car is damaged by fire, theft, vandalism, or a collision while in the shop's possession, the shop may be liable as a bailee. General liability and the shop's own physical damage do NOT cover this — that is the job of garagekeepers.

Garagekeepers can be written on three coverage bases, and the exam expects you to rank them:

Exam trap: Under legal liability, if the customer's car is vandalized by a third party with no negligence by the shop, the shop is NOT liable and garagekeepers pays nothing. Direct primary would pay regardless of the shop's fault — which is why dealers often prefer it for customer goodwill.

Worked priority example: A customer's $20,000 car burns at a body shop. The customer has personal collision/comprehensive; the shop has garagekeepers DIRECT EXCESS with a $500 deductible. The customer's own insurer pays first (its limit minus its deductible), and the shop's garagekeepers responds only for any amount the customer's coverage does not pay, above the garagekeepers deductible. Under DIRECT PRIMARY, the shop's insurer would pay first regardless of the customer's coverage.

Covered Pollution and Excluded Exposures

Garagekeepers covers damage to the auto itself but does NOT cover the customer's personal property inside the car (a laptop left on the seat) — that is excluded as it is not part of the auto. The Garage form also excludes liability assumed under contract beyond the insured's common-law bailee duties, and damage to property the insured owns. Distinguishing the shop's OWN inventory (physical damage) from CUSTOMERS' autos (garagekeepers) is the key categorization the exam tests.

Dealer Physical Damage and Special Options

A dealer's inventory changes daily, so physical damage on the dealer's own and inventory autos is often written on a reporting form / blanket basis: the dealer reports inventory values periodically and premium adjusts to actual exposure. Underreporting triggers a coinsurance-style penalty.

Worked reporting-form example: A dealer reports an inventory value of $400,000 when actual value at the loss date was $500,000 (an 80% report). A $50,000 partial loss is paid in proportion: ($400,000 ÷ $500,000) × $50,000 = $40,000, less any deductible. Honest reporting avoids the penalty.

Optional and tested coverages on the Garage/Dealer form:

• False Pretense — covers loss of an auto from inventory due to acquiring it from a seller without good title, or voluntarily parting with it because of a trick or fraud (theft-by-deception). Standard physical damage excludes this.
• Garagekeepers — Drive Other Car style extensions for owners.

Covered-Auto Symbols on the Garage Form

The Garage form uses its own symbol set (the 30-series symbols), distinguishing the dealer's owned autos, dealer demos/furnished autos, and customers' autos. Liability for the dealer's operations is typically the broad 'any auto' equivalent, while physical damage uses owned/inventory symbols.

Products and Completed Operations for Dealers

Because the Garage form bundles general liability, it also picks up the dealer's products-completed operations exposure — for example, liability arising after a faulty repair causes a customer's brakes to fail down the road. This is a non-auto liability the CGL would normally handle, but for an auto-trade risk it sits inside the Garage form's liability section. Candidates should recognize that the Garage form is genuinely a multi-line package: auto liability, premises/operations, products-completed operations, garagekeepers, and physical damage all under one cover.

Symbol and Limit Selection Recap

Like the BACF, each Garage coverage activates only when its symbol and limit appear on the declarations. A dealer typically writes broad liability covering all autos used in the business, garagekeepers on a chosen basis (legal, direct primary, or direct excess) with a per-location limit, and dealer physical damage on a reporting/blanket basis for inventory. Forgetting to schedule garagekeepers leaves the customer-auto bailee exposure entirely uninsured — a costly gap the exam highlights.