What is it?
Garage Keepers Insurance (GKI) is an optional coverage that can be added to your business insurance policy to protect your customers' vehicles while they are in your care, custody, and control. This is essential for any service and repair shop in Florida, as it helps mitigate financial risks and protects your reputation.
Why do you need it?
As a service and repair shop in Florida, you are legally responsible for any damage that occurs to a customer's vehicle while it is in your possession. This includes damage caused by your employees, theft, vandalism, or even natural disasters. Without GKI, you could be on the hook for costly repairs or replacements, which could significantly impact your business.
Types of Garage Keepers Insurance Coverage:
There are three main types of GKI coverage:
Legal Liability: This is the most basic and least expensive option. It covers damage to a customer's vehicle only if your shop is legally liable for the damage. Examples include an at-fault accident on a test drive, the vehicle falling off the lift, or scratching the vehicle with a tool while repair.
Direct Primary: This is the most comprehensive and expensive option. It covers damage to a customer's vehicle regardless of who is at fault for the damage. This includes damage caused by acts of nature, theft, vandalism, and not-at-fault accidents. This is similar to having comprehensive and collision coverage on your personal auto policy.
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Direct Excess: This option acts as a middle ground between the two above. It covers everything under the legal liability option, but it also provides coverage for situations where your shop is not legally liable for the damage. However, it only covers the portion of the repair cost that exceeds the customer's own auto insurance coverage.
Factors to Consider when Choosing GKI:
The size of your business: Larger businesses with a higher volume of customer vehicles may need more comprehensive coverage.
The types of vehicles you service: Shops that work on high-value vehicles may need higher coverage limits.
Your risk tolerance: If you are risk-averse, you may want to choose more comprehensive coverage.
Your budget: The cost of GKI will vary depending on the type of coverage you choose and your risk factors.
Additional Tips:
Review your GKI coverage regularly: As your business grows or changes, you may need to adjust your coverage levels.
Make sure your employees are aware of GKI coverage: This will help them understand the importance of handling customer vehicles carefully.
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Communicate your GKI coverage to your customers: Let them know that their vehicles are protected while in your care.
This information is not intended to be a substitute for professional insurance advice. Please consult with a qualified insurance agent to discuss your specific needs.
Conclusion
Garage Keepers Insurance (GKI) is an essential type of coverage for any service and repair shop in Florida. It provides financial protection against the risk of damage to customers' vehicles while they are in your care, custody, and control. With three different types of coverage available, you can choose the option that best fits your budget and risk tolerance.
Here are the key points to remember:
- GKI is required by Florida law for all dealers.
- It protects you from financial responsibility for damage to customer vehicles, regardless of fault.
- There are three types of coverage: Legal Liability, Direct Primary, and Direct Excess.
- The cost of GKI depends on your business size, risk factors, and chosen coverage level.
- It is important to review your GKI coverage regularly and communicate it to your employees and customers.
- By investing in GKI, you can protect your business from financial losses and ensure the peace of mind of your customers.
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