A few insurance questions

MaxWax

MaxWax

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I recently made MaxWax Auto Detailing LLC a legitimate company and bought a trailer, naturally my next step was to seek insurance, something I didn't really think would be an issue. After trying 3 different insurance agencies I finally found one that would do a small business. Today, they called and said that getting general liability insurance probably wouldn't be an issue but since I'm sixteen years old, none of the companies were willing to do garage keepers insurance. Will it be a big pain down the line if I don't have garage keepers? Do any of you make due without it? Any input would be appreciated.

Regards,

Max
 
from the way I understand it IF you are not operating the customers car you do not need garage keepers Ins.( this is what my agent told me)

Your liability will cover anything else.

If I'm wrong sorry but thats how it was explained to me.
 
If you'll be driving the client's car you better seriously look into some garage keepers coverage. If you won't be driving the cars at all then you may want to sit a grand off to the side in a piggy bank to cover any panels that you may screw up. I've had a few minor incidents in the past where I had to have a panel repainted for a client and both times, the repair bill was just shy of my garage keepers deductible so the garage keepers (for me) so far has been a useless waste of money. Now if you'll be working on exotics, antiques or show cars with super expensive paint jobs you may want to have a few of those piggy banks set aside.
 
:iagree:What he said. Garage keepers covers the customers car if you damage it. Get the max liability you can afford.
 
Good info, I have been thinking of starting something very similar!
 
So if I were to do something like burn through clear coat, would general liability insurance cover that?
 
MaxWax said:
....I'm sixteen years old....
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Stated Age in this Post:
16

Stated Age Per your Mini Statistics:
Date of Birth
July 8, 1990 (21)

I hate when that type of discrepancy happens...Don't you? What gives?
 
FUNX725 said:
Stated Age in this Post:
16

Stated Age Per your Mini Statistics:
Date of Birth
July 8, 1990 (21)

I hate when that type of discrepancy happens...Don't you? What gives?
Click to expand...

To be perfectly honest, some forums don't allow users under 18. I don't think the fact that I'm 16 makes me any less of a positive contributor to the forum than you or anyone else on AGO. So I was dishonest and for that I apologize.
 
MaxWax said:
So if I were to do something like burn through clear coat, would general liability insurance cover that?
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Nope, that's what the garage keepers policy covers. The general liability would cover the customer's house if you were there doing a job and while you were at lunch your faulty electrical cord burned down their house, or if you had a tangled up mess of cords laying about and the client got all tripped up in them and fell and broke a hip it would cover their medical bills and pain and suffering etc.
 
MaxWax said:
So if I were to do something like burn through clear coat, would general liability insurance cover that?
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Burning through clear coat would not be covered under a general liability policy as there is a "care, custody and control" exclusion that excludes damage to the property, in this case the automobile, that you are working on. You would need a garage keepers liability policy to protect you from damage to property in your care, custody and control.
Hopefully your age won't make a difference to AG as you appear to be wise beyond your years. I'm also hoping they won't exclude old guys as I'll be 65 in three weeks.
 
Well, looks like I'm going to have some trouble then :mad:
 
tuscarora dave said:
Nope, that's what the garage keepers policy covers.
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However, as I mentioned earlier. The deductible for the garage keepers is usually at least $500 if not $1000 and the repair bill to have a panel on an average car repainted would probably not exceed $500 depending on the cost of living in your area. If you were in NJ or CA I think everything is more expensive there than most other areas of the country. If your deductible is $500 and the repair is $450 you'll be paying that out of pocket.

Now if you were delivering the car back to the customer and got in an accident and caused $15,000 in damage you'd better have that garage keepers policy or you'll be paying out of pocket for that too. The general liability will not cover that.

Now let's say that hypothetically, the above scenario happened and above the damage to the car the customer would sue you for a large amount of money for the inconvenience this all caused them, let's say that because they didn't have their car and grampa had an emergency or something like that. You might be liable because gramps' heart attack could have been avoided or fixed in time had the customer had the car there to rush him to the hospital. they sue you for $1,000,000. That's what the general liability covers.
 
To be honest, going in I knew that the deductible would likely be more than the cost to re-spray a panel. I just wanted the garage keepers so I could tout myself as being "fully insured." I never deliver cars so that's not an issue. But I can't really boast on being insured if I only have liability insurance without misleading my clients, what do you think?
 
dad07 said:
what Kind of trouble?
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Just that I can't claim to be fully licensed and insured which I had planned to use as a major selling point. Sorry if that was misleading haha
 
I'll give you two suggestions MaxWax....

1. If you cannot get the GK insurance then set aside some money in a piggy bank to cover any damage. Part of your rate structure should include insurance cost recovery so collect it whether or not you can get the insurance. State a provision to your clients how you would proceed in the event their car is inadvertently damaged. Even go as far as managing that job in a manner that eliminates moving the car in the first place. Your liability risk is still there but most people will likely accept it and appreciate you being up front about it. If they know you are 16, the good clients will give you some leeway and support/trust you. Some people may not give you the business and that is fine too; don't burn bridges, tell them you understand and move on. You are young and in a number of years this will be a non-issue. Be patient.

2. This is what I would recommend.... establish a silent partner for your business until you come of age and have them support you in getting the GK policy now. This is similar to co-signing a loan. I am sure there may some stipulations you need to accept but regardless of the pain, you are covered which is what you want in the first place.
 
mwoolfso said:
I'll give you two suggestions MaxWax....

1. If you cannot get the GK insurance then set aside some money in a piggy bank to cover any damage. Part of your rate structure should include insurance cost recovery so collect it whether or not you can get the insurance. State a provision to your clients how you would proceed in the event their car is inadvertently damaged. Even go as far as managing that job in a manner that eliminates moving the car in the first place. Your liability risk is still there but most people will likely accept it and appreciate you being up front about it. If they know you are 16, the good clients will give you some leeway and support/trust you. Some people may not give you the business and that is fine too; don't burn bridges, tell them you understand and move on. You are young and in a number of years this will be a non-issue. Be patient.

2. This is what I would recommend.... establish a silent partner for your business until you come of age and have them support you in getting the GK policy now. This is similar to co-signing a loan. I am sure there may some stipulations you need to accept but regardless of the pain, you are covered which is what you want in the first place.
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:iagree: Great advice there.
 
mwoolfso said:
I'll give you two suggestions MaxWax....

1. If you cannot get the GK insurance then set aside some money in a piggy bank to cover any damage. Part of your rate structure should include insurance cost recovery so collect it whether or not you can get the insurance. State a provision to your clients how you would proceed in the event their car is inadvertently damaged. Even go as far as managing that job in a manner that eliminates moving the car in the first place. Your liability risk is still there but most people will likely accept it and appreciate you being up front about it. If they know you are 16, the good clients will give you some leeway and support/trust you. Some people may not give you the business and that is fine too; don't burn bridges, tell them you understand and move on. You are young and in a number of years this will be a non-issue. Be patient.

2. This is what I would recommend.... establish a silent partner for your business until you come of age and have them support you in getting the GK policy now. This is similar to co-signing a loan. I am sure there may some stipulations you need to accept but regardless of the pain, you are covered which is what you want in the first place.
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So I should just tell clients that I don't have GK but I would pay in the event of damage? In regards to a silent partner, I was planning to call the insurance agency tomorrow to see if having my dad as a partner would help. Also, how do I go about making a silent partner a legitimate part of the company?
Thanks for the help everybody!:dblthumb2:
 
I own a large insurance Agency....I'll check with my Commercial Agents but in general: (this is for Illinois and Indiana)

A General Liability Policy covers you for things you are legally liable for.

Garage Keepers is for cars in your care, custody and control and is for Comp & Collision Only. There are 2 different levels of this coverage; the first is when your insurance is primary, the second is when your insurance is secondary to the customers. In your example this would not apply to the damage you caused.


Damage you cause to a clients car is covered under the GL Policy and not the Garage Keepers. Nows here the important part; if a 16 year old client files a claim for his negligent work and ensuing damage, he would be canceled ASAP. Also, this claim would show up on his loss runs and be available to any Agent in the USA to view. YOU DON'T want to become uninsurable!

There are a lot of other things to consider but the above should be seriously reviewed!
 
MaxWax said:
To be perfectly honest, some forums don't allow users under 18. I don't think the fact that I'm 16 makes me any less of a positive contributor to the forum than you or anyone else on AGO. So I was dishonest and for that I apologize.
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I agree... I don't care if your 16 or 60 contribution is always a +



MaxWax said:
Just that I can't claim to be fully licensed and insured which I had planned to use as a major selling point. Sorry if that was misleading haha
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Glad you cleared that up,was afraid you were in some kind of trouble.

being over insured can be a good thing.......hope your dad is willing to help because it looks like you have good idea on what you want out of life and you want to do it the right way...Kudos young man!
 
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