Garage keepers insurance: customers' autos in your care
Garagekeepers pays for loss or damage to a customer's auto while you are attending, servicing, repairing, parking, or storing it. It exists because liability policies exclude damage to property in your care, custody, or control. It can be written on a legal liability basis or on one of two direct bases, and against three causes of loss: comprehensive, specified causes of loss, and collision.
Garage liability vs garage keepersThe exclusion it fills
Start with what is missing. IRMI describes care, custody, or control as an exclusion "common to several forms of liability insurance, which eliminates coverage with respect to damage to property in the insured's care, custody, or control," and lists garagekeepers among the specialized coverages that take the exposure back (IRMI, care, custody, or control). A shop's liability coverage, garage liability or a general liability policy, carries that exclusion, and a customer's car is property in your care from the moment the keys cross the counter. So the coverage that answers for the car is a separate grant, which IRMI defines as provided under a garage policy "for liability exposures with respect to damage to a customer's auto or auto equipment that has been left in the dealer's care for service or repair" (IRMI, garagekeepers coverage). The word "dealer" in that definition is the form's lineage, not a limit on who buys it; the repair shop with six customer cars on the lot has the exposure in its purest form. If you are still weighing this coverage against the liability form, the decision is made on garage liability vs garage keepers; this page assumes you have the exposure and want to know how the coverage is built.
Source: IRMI on garagekeepers and the direct bases, with the CA 99 37 form analysis for the causes of loss
The deductible is a third variable and it is structural rather than a single number: on the comprehensive and specified causes of loss side it can apply to all causes or to theft and vandalism only, with a per-event maximum, while the collision deductible applies per auto with no maximum. One hailstorm across a full lot is where that difference stops being an accounting detail.
Three bases: legal liability, direct excess, direct primary
The form's default is legal liability. RNC-Pro's analysis of the ISO garagekeepers endorsement, CA 99 37, quotes the grant as "amounts the insured is legally obligated to pay as damages because of loss or damage to a customer's auto," and notes the archived garage form carried the same condition with no direct option built in (RNC-Pro, CA 99 37 Garagekeepers Coverage). Legally obligated is the operative phrase. The technician who drops a car off the lift creates a legal obligation; the hailstorm that dents every car in the lot, or the thief who cuts the fence at 3 a.m., generally does not, and on a legal liability basis the customer is sent to their own insurer, if they have one, and to you if they do not.
The two direct options remove the fault condition. IRMI records the older name, garagekeepers extra legal liability, as extending the coverage "to provide coverage for damage to customers' automobiles regardless of the legal liability of the insured," and notes the industry now says "direct" instead (IRMI, garagekeepers extra legal liability). The endorsement splits direct in two. Direct excess, in RNC-Pro's words, "keeps the primary coverage on a legal liability basis but does not impose legal liability restrictions on an excess basis": when you are not liable, it pays only after the customer's own collectible insurance is used up or turns out not to exist. Direct primary "responds to a covered loss before any other available coverage that might apply," the customer's policy included, and costs more than the excess option for that reason. Which basis a shop should carry depends on its customers, its lot, and its tolerance for sending a customer to their own insurer after a storm, and that is an agent's conversation, not a rule.
Three causes of loss, and how the deductibles attach
Whichever basis you buy, the coverage is written against causes of loss chosen and priced separately, and the endorsement offers three. Comprehensive is loss from any cause except collision with another object or overturn. Specified causes of loss is the narrower list: fire, lightning, explosion, theft, mischief or vandalism. Collision is collision with another object or overturn, the road-test rear-ender and the car that rolls off the lift. A shop typically pairs collision and comprehensive, so the lot fire and the road-test crash are both answered; a shop that picks specified causes of loss instead of comprehensive has traded away hail, flood, and falling objects to save on the premium, which is a deliberate choice or a mistake depending on whether anyone said so out loud.
The deductibles attach differently by cause. Per the same analysis, the comprehensive and specified causes of loss deductible can apply either to every loss or only to theft and mischief or vandalism, and either way carries a maximum for all such loss in one event, which is what keeps a hailstorm over forty cars from being forty deductibles. The collision deductible applies per auto and has no such cap (RNC-Pro, CA 99 37). A body shop with a dozen customer vehicles waiting on parts should read its per-event maximum before it reads anything else on the declarations; the shop-level version of that conversation is on auto body shop insurance, and the general repair stack is on auto repair shop insurance.
Where it sits on the policy, and the storage and tow-in cases
On the ISO garage coverage form, garagekeepers was Section III, between the liability section and physical damage. Since ISO's 2013 revision, dealers are written on the Auto Dealers Coverage Form and repair shops on standard carriers are typically written on a general liability policy plus a business auto policy, with garagekeepers added to the auto policy by the CA 99 37 endorsement quoted above (RNC-Pro, ISO Garage Coverage Form Archive; Faber, InsNerds, 2019). The practical consequence is that a repair shop's garagekeepers may live on a different document from its liability coverage, with its own limit, its own deductibles, and its own basis, and a certificate that shows "garage liability" proves nothing about it. The form that the liability half descends from is on garage liability insurance.
Two custody cases stretch the definition. Storage is the business where the car is in your care and nothing else is happening to it: a storage lot, an impound yard, a dealership holding a trade-in for a week. The endorsement's grant names parking and storing alongside servicing and repairing, so the exposure is squarely inside the coverage, and the limit needs to reflect the number of vehicles on the ground on the worst night, not the average. Texas licenses vehicle storage facilities separately, and the one place Texas law names garagekeepers as a license condition is read on Texas garage liability insurance. Tow-in is the other edge. ISO's commercial auto program, effective December 1, 2020, defines towing operations as "attending, servicing, or repairing a customer's auto at the location where it becomes disabled, including transporting the auto from that location to the repair garage" (IRMI, towing operations). A shop that fetches customer cars on its own truck should ask the agent, by name, how the policy treats the vehicle while it is in transit, and get the answer in writing; the mobile trade's version of the custody question, where the car never enters the shop at all, is on mobile mechanic insurance. The rest of the family is on the coverage hub.