If you are planning to open an auto repair shop, then one of the items that must not be missing from your budget is insurance.
The truth is that every auto repair shop requires mandatory insurance policy coverage because, without such covers, you may be running a business that can wipe out your entire savings and put you in debt if anything goes wrong. For example, if a client gives you his or her car for repairs, and the car gets stolen from your shop, you are likely going to be liable for the damages.
For this reason, most owners of auto repair shops usually have the necessary insurance policy in place and if anything happens to the vehicles under their care, the insurance company takes care of the cost hence preventing the owner of the auto repair shop from paying for the damages or settling out of his or her pocket.
Please note that the fact that you have insurance coverage for your auto repair shop does not automatically mean that the insurance company will be liable for any damages that happen under your care. For insurance companies to be liable, the insurance must be active (your must be paying your premiums as when due).
Best Insurance Policies for an Auto Repair Business and How Much They Cost
General liability Insurance
General liability insurance is no doubt, one of the best insurance policies that an auto repair shop business must have. This is important because general liability insurance offers liability insurance coverage that helps protect a business from claims because of bodily injuries or property damage to others within your business premises.
The truth is that, if you do not have general liability insurance coverage, you will be required to pay from your pocket whenever there are bodily injuries or property damages as a result of carrying out your job.
The Cost of General Liability Insurance for an Auto Repair Shop
In the United States, the average cost for a $1 million limit general liability policy for an auto repair shop ranges from $57 to $79 per month, or $600 to $950 per year.
Garage Keepers Insurance
Another very important insurance policy cover that an auto repair shop must have in place is garage keepers insurance. Basically, garage keepers liability insurance is a unique insurance policy that auto businesses use to protect clients’ vehicles (cars, trucks, vans, motorcycles) from fire, theft, vandalism, and collision whenever the vehicles are kept in the auto repair shop. In states like Texas and Virginia et al, garage keepers’ insurance is referred to as ‘storage location insurance.’
The Cost of Garage Keepers Insurance for an Auto Repair Shop
Going by the cost estimate at howmuch.net, annual rates for garage keepers’ insurance policies are between $1,000 and $1,300 on average. Interestingly, some auto repair shops (businesses) can pay as little as $800 per year, while those who require additional coverage may pay as much as $2,000 yearly.
Workers’ Compensation Insurance
Workers’ compensation insurance policy is yet another compulsory insurance policy coverage that an auto repair shop business should have in place. The fact that you will have some employees working with or for you means that you will need workers’ compensation insurance policy coverage for them.
As a matter of fact, in the United States of America, it is illegal to have workers and not have workers’ compensation insurance policies to protect them. Workers need to be protected from workplace accidents, and disability et al.
Please note that the only reason why you may not need a workers’ compensation insurance policy is if you are operating a one-man business – a sole proprietorship. Unless you are a one-man auto repair shop business, you will need a policy to help cover your employees.
Part-time and full-time employees require your business to take out a workers’ compensation policy. This insurance cover will keep your employees and their families covered for medical fees and lost wages for work-related injuries and illnesses.
The Cost of Workers’ Compensation Insurance for Auto Repair Shop
In the United States, the average rate auto repair shops are expected to pay for workers’ compensation under the auto repair class code is around $1.29 per $100 of payroll.
Commercial Auto Insurance
Commercial auto insurance policy cover is no doubt one of the essential insurance policy covers that an auto repair shop should consider having in place. As expected, a standard auto repair shop is supposed to have official vehicles.
These vehicles are used to transport tools and workers to places where they are expected to carry out auto repair work when the need arises. Basically, commercial auto insurance protects the cars, trucks, and vans that you use for your auto repair business.
Commercial auto insurance can help pay for property damage and medical costs in an accident, along with weather damage, theft, and vandalism.
The Cost of Commercial Auto Insurance for Auto Repair Shop
In the United States, the average cost of commercial auto insurance for auto repair shops is $120 per month, or $1,440 a year.
Tools and Equipment Insurance Coverage
Lastly, another very important insurance policy cover that an auto repair shop need is tools and equipment insurance coverage.
This is very important for an auto repair shop because you will require auto mechanic tools and equipment to operate an auto repair shop. Basically, tools and equipment insurance is an insurance policy that covers specific equipment and tools owned or in possession of the owner of an auto repair shop.
Tools and equipment insurance provide protection for tools and equipment against dangers like fire, theft, vandalism, and flood, among others. Please note that tools and equipment insurance also cover the repair or replacement of lost, stolen, or damaged tools and equipment.
The Cost of Tools and Equipment Insurance for an Auto Repair Shop
Please note that the average price of tools and equipment insurance tends to range from $169 to $400 per year. Though, the actual price depends on some key factors such as the type and value of tools and equipment being insured.
What Insurance Companies Offer Such a Policy?
- Acuity Insurance
- Allianz Life
- Allied Insurance
- American National Insurance Company
- Accident Fund Insurance Company of America
- American International Group (AIG)
- AmTrust Financial Services
- Gerber Life Insurance Company
- Globe Life And Accident Insurance Company
- GMAC Insurance
- Mutual of Omaha
- New York Life
- State Farm
- Pacific Life
- 21st Century Insurance
- Liberty Mutual
- Lincoln National Corporation
- Manhattan Life Insurance Company
- Nationwide Mutual Insurance Company
- New York Life Insurance Company
- MEGA Life and Health Insurance
- Zenith Insurance Group.
Please note that apart from the insurance policies and the insurance companies listed above, there are several other insurance policies and insurance companies not listed above that also provide insurance policy covers that an auto repair shop business will need to effectively run the business.
So, in order to get it right, we will recommend that you discuss it with an insurance broker in your city. They are in a better position to recommend suitable insurance policy covers that can give your auto repair shop adequate coverage.