Some of the car dealers that have been in the business for more than 5 years may refer to used auto dealer insurance as Garage Keepers Liability. The truth is that Garage Keepers coverage is just 1 of about 15 different coverages that are available to a policyholder. Garage Keepers Liability Insurance provides coverage for vehicles that are in the care, custody, and control of a used car dealer while the dealer doesn’t own the vehicle.
A good example of this exposure is the repair shops that take vehicles in to fix them but the vehicles are not owned by the dealer at this time. A better example is a test drive. What happens if you crash a car that you were test driving to see if you wanted to buy it? The car is not yours yet so your physical damage coverage (comprehensive and collision coverage) won’t cover it because that coverage only applies to vehicles if you own them.
For this reason, Garage Keepers Coverage was created to offer an additional layer of protection.
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