Auto repair shops and dealers usually need garage liability, garagekeepers coverage for customer vehicles, commercial property, workers’ compensation and often dealer open lot coverage, tools coverage and umbrella. California repair shops register with the Bureau of Automotive Repair, and most dealers need a $50,000 surety bond for their DMV license. SF Coverage reviews garage renewals for free within three business days, including garagekeepers limits and dealer lot terms.
Who sets your insurance requirements
- California DMV
- A surety bond, $50,000 for most dealers, as a condition of the dealer license.
- Landlords
- General or garage liability limits, the landlord as additional insured, pollution terms and waiver of subrogation.
- Floor plan lenders
- Dealer open lot coverage for inventory with the lender as loss payee.
- Fleet and insurance direct repair programs
- Specific limits, garagekeepers coverage and certificates before sending vehicles.
Coverage auto repair shops and dealers usually carry
Exposures to get right
Customer vehicles
Cars in your care can be damaged, stolen or burned, and garagekeepers terms decide who pays.
Faulty work
A brake job or repair that fails can lead to injury and property damage claims.
Road tests and drivers
Employees driving customer and dealer vehicles bring auto liability.
Fluids and fire
Fuel, solvents and paint booths raise fire and pollution exposure.
In California
- Businesses that repair or diagnose vehicles for pay in California must register with the Bureau of Automotive Repair as automotive repair dealers and give customers written estimates before work.
- Most California vehicle dealers must post a $50,000 surety bond with the DMV under Vehicle Code section 11710, with a $10,000 bond for certain motorcycle, ATV and small wholesale dealers.
- Cal/OSHA requires an Injury and Illness Prevention Program, and hazardous materials such as used oil and solvents fall under state and local environmental rules.
How SF Coverage works for auto repair shops and dealers
Have these ready
- BAR registration and any DMV dealer license number
- Services offered and annual revenue by service type
- Number of customer vehicles on site on a typical day and their values
- Dealer inventory values and floor plan details
- Payroll by technicians, sales and office staff
- Current policies and five years of loss runs
Insurance for auto repair shops and dealers, answered
What is the difference between garage liability and garagekeepers?
Garage liability covers injuries and property damage your operations cause to others, such as a customer slipping in the shop or a road test accident. Garagekeepers covers customer vehicles while they are in your care, which general liability excludes. Most shops need both. We read your policy and show the limits, deductibles and coverage basis for each.
Does my policy cover a customer’s car stolen from my lot?
Only if you carry garagekeepers coverage that includes theft, and the terms matter. Legal liability forms pay only when you were legally responsible, while direct forms pay regardless of fault. Limits per vehicle and per location may be lower than the cars you hold. We compare your typical vehicle values with your limits.
Do California dealers need a bond?
Yes. Most California dealers must post a $50,000 surety bond with the DMV under Vehicle Code section 11710, and certain motorcycle, ATV and small wholesale dealers post $10,000. The bond protects consumers, not the dealer. Confirm current amounts with the DMV. The free SF Coverage workspace can hold your bond expiry on the same calendar as your policies.
Does insurance cover faulty repair work?
Policies usually cover injury and damage to other property caused by faulty work, but often not the cost of redoing the work itself. Exclusions vary between garage forms. If a failed repair causes an accident, the details of the policy matter a lot. We read your forms and explain what a faulty work claim would and would not include.
Can you review our garage renewal if another broker placed it?
Yes, for free. Send the renewal offer and expiring policy, and within three business days SF Coverage explains changes in premium, limits and deductibles, plus the garagekeepers basis, per vehicle limits and dealer lot terms. Your broker stays in place. Every SF Coverage proposal shows the insurer commission it is paid.
General information. Coverage depends on the policy an insurer issues.