Auto Repair Shop Insurance: What Your Shop Needs

Core coverages

General descriptions. Policy forms and availability vary by insurer and state.

Garagekeepers coverage explained

Definitions vary by policy.

Garagekeepers limits should reflect the highest total value of customer vehicles you might have on site at once, including overnight. Shops that work on high-value or classic vehicles need higher limits.

Faulty work and completed operations

If a repair you performed later causes a crash or damage, completed operations coverage under your liability policy may respond to resulting injuries and damage. Many policies exclude the cost of redoing the faulty work itself. Ask how your policy treats faulty workmanship and parts.

Other coverages to consider

• Pollution liability for spills of oil, fuel, and solvents.
• Employment practices liability for hiring and workplace claims.
• Cyber liability for customer data and payment systems.
• Business income to replace lost earnings after a covered property loss.
• Dealer or drive-away coverage if you test drive or deliver customer vehicles on public roads.

What affects the price

• Type of work, such as general repair, collision, transmission, or towing.
• Number of employees and payroll.
• Value of customer vehicles in your care.
• Building construction, fire protection, and security.
• Claims history and safety programs.
• Limits and deductibles.

Reducing risk

• Secure keys and lock vehicles after hours.
• Inspect and maintain lifts, and train staff on safe use.
• Document vehicle condition with photos at drop-off.
• Store and dispose of fluids properly.
• Check driver records for employees who test drive vehicles.

Certificates of insurance

Customers, general contractors, and landlords often require a certificate of insurance showing your business auto limits, and some require being named as an additional insured or a waiver of subrogation. Ask your agent which endorsements your policy includes, and request certificates before work begins. A certificate shows coverage; it does not change it.

Umbrella coverage

Serious commercial vehicle accidents can produce very large claims. A commercial umbrella or excess liability policy adds limits above your business auto, general liability, and employer's liability policies, and many contracts require higher limits than a business auto policy alone provides.

What to have ready

• Business name, address, and years in business.
• Services offered and annual revenue.
• Employees and payroll.
• Building details and security.
• Typical and maximum value of customer vehicles on site.
• Shop-owned vehicles and drivers.
• Five years of claims history.

Verify the insurer and agency

Before buying through any website or app, confirm who is selling you the policy and who will issue it:

1. Find the licensed agency or insurer named in the site's footer, terms, or license page.
2. Look up the agency or producer on your state insurance department's license search, or through the National Insurance Producer Registry (NIPR).
3. Look up the insurer on your state insurance department's company search to confirm it is authorized in your state.
4. Save the insurer's name and policy number once issued, since that is who handles claims.

A legitimate service will make this information easy to find. Be cautious if you cannot identify the licensed entity.

Garage policies vs. business owner's policies

Some insurers write auto service businesses on a dedicated garage policy that combines garage liability and garagekeepers, while others use a business owner's policy (BOP) with property and general liability, adding garagekeepers by endorsement. Either approach can work; what matters is that customer vehicles, completed operations, and your tools are covered. Compare the forms, not just the price.

Towing and roadside operations

If your shop tows vehicles, you need commercial auto coverage for the tow truck and on-hook coverage for customer vehicles being towed, which garagekeepers may not include. Tow operators may also need to meet state or local permit and insurance requirements. Tell your agent about any towing, roadside, or vehicle transport work.

Common claim scenarios

General examples. Coverage depends on policy wording.

Choosing limits

Liability limits of $1 million per occurrence are common for repair shops, and landlords, dealers, and fleet customers may require specific limits and additional insured status. Set garagekeepers limits at the maximum value of customer vehicles on site at one time, and property limits at the cost to replace your building improvements, equipment, and inventory. An umbrella can add protection above your liability and auto policies.

Test drives and employee driving

Test drives and customer vehicle deliveries put your employees behind the wheel of cars you do not own. Garagekeepers covers damage to the customer's vehicle, subject to your option, but liability to others during a test drive depends on your garage or auto coverage. Check motor vehicle records for any employee who drives customer cars, set written rules for test drives, and confirm with your agent how each scenario is covered.

Payment data and cyber risk

Repair shops store customer names, phone numbers, vehicle information, and payment data, and many use cloud-based shop management software. A data breach or ransomware attack can halt operations and trigger notification costs. Cyber liability coverage can pay for breach response, data restoration, business interruption, and related liability, depending on the policy.

Common insurance mistakes for shops

• Relying on general liability for customer cars without garagekeepers.
• Setting garagekeepers limits for an average day rather than the busiest day.
• Leaving portable tools and diagnostic equipment uninsured.
• Using personal auto policies for shop vehicles.
• Underinsuring the building or equipment after upgrades.
• Not reviewing coverage when adding services such as towing or detailing.

Working with an independent agent

Commercial policies vary more than personal auto policies, and two quotes with the same price can cover very different things. An independent agent can compare garage and business owner's programs from several insurers, explain differences in garagekeepers options and exclusions, and help you meet landlord and customer insurance requirements. Review coverage with your agent every year and whenever your operations change.

Annual coverage review

Each year, update your agent on revenue, payroll, new equipment, building improvements, and new services. Many commercial policies are audited at the end of the term based on actual payroll or revenue, so accurate estimates help avoid surprise bills or credits.

State requirements

Most states require workers' compensation once you have employees, and some states require auto repair businesses to register or hold a license with a consumer protection or motor vehicle agency. Commercial vehicles must meet at least state financial responsibility minimums. Confirm the requirements for your state and city before you open or expand.

When a claim happens

Report incidents promptly, document damage with photos, keep the customer informed, and preserve parts and records. For customer vehicles, garagekeepers claims depend on the option you chose, so know whether your policy pays regardless of fault or only when you are liable.

What to have ready for a shop quote

These details help produce accurate quotes.

1. Business details. Name, address, and years in business.
2. Operations. Services and annual revenue.
3. Employees. Headcount and payroll.
4. Customer vehicles. Typical and maximum values on site.
5. Claims history. The past five years.

Auto repair shop insurance FAQs

Related guides

• Commercial auto insurance
• Commercial auto insurance quote
• Get a quote
• Tow truck insurance

Partner quote options

Your next step

Request a quote, and a licensed agent will compare options available to us using the coverage you choose.