Your Full Insurance Glossary: The Auto Repair Industry

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Your Full Insurance Glossary: The Auto Repair Industry

By Zuma Insurance Services | January 24, 2018

Your Full Insurance Glossary: The Auto Repair Industry

If you work in the auto repair industry or own an auto repair shop, then you already know how important auto repair shop insurance is. If you don’t, it’s time you learn the necessary insurance types for any repair shop, then find a reputable insurance provider to help you through thick and thin. First, though, here are a few insurance glossary terms you should familiarize yourself with.

Your Full Insurance Glossary: The Auto Repair Industry

Business Auto Insurance

While Garage Keepers Insurance (see below) covers the vehicles in your shop for repair, it does not cover your own business vehicles. For that, you will need standard Business Auto Insurance.

Business Interruption Insurance

This type of auto repair shop insurance covers you in case of property destruction or another event that shuts your business down entirely, allowing you still to pay the bills while you get up and running again. Beware, warns Entrepreneur, of low per-incident limits. In many cases, these limits may mean that in a catastrophe, you aren’t actually covered for nearly as much as you should be. In extreme cases, this could shut you down for a long time or even bankrupt you.


This is the amount you have to pay out of pocket before your insurance company will step in to cover the rest of the damages resulting from property damage, a personal injury suit, business interruption, worker’s compensation claims and more.

Equipment Breakdown Insurance

Equipment breaks, and when it does so in the middle of business operations, it can be expensive to fix. This type of insurance takes money out of the mix.

Errors and Omissions Insurance

This type of insurance covers a mistake made when fixing a car. It also covers a mechanic’s failure to catch or address an obvious problem that could prove dangerous to the driver, such as a problem with one of the systems the mechanic worked on.

Garage Keepers Insurance

Your customer’s cars are not protected under your Garage Liability coverage (see below), so you will need to get additional protection for your customers’ cars while at your shop.

Garage Liability Insurance

This type of insurance covers the business operations that take place at a repair shop, specifically the property and bodily damage that may occur as a result of those operations. Note that, according to Investopedia, Garage Liability Insurance doesn’t cover what happens to your customers’ cars; just to yours. You’d need to get a separate contract for that.


A monthly amount you pay to keep your insurance plan(s) in place is called a premium. If you fail to pay your premium, insurance will lapse. Usually, your premium goes up as your deductible goes down, though other factors are also at play here.

Property Insurance

If your Garage Liability Insurance does not provide a high enough level of coverage for your comfort, you may opt to add this in. Standalone property insurance helps ensure that your physical property – the land, the buildings, and anything on or in them – is protected against natural disaster, deliberate intent, accidents and damage in general.

Worker’s Compensation Insurance

When workers are injured, they need a way to pay for medical bills and replace lost wages. Worker’s Compensation helps them with those funds they can get back on their feet quickly and resume life as usual.

Your Full Insurance Glossary: The Auto Repair Industry


  • No one insurance type protects against damage to property, equipment, workers, patrons, your vehicles and theirs all in one place. You’ll need to carry several policies to protect yourself fully.
  • Your deductible and premium are related. Typically, one goes up as the other goes down, so it is a balancing act with which you will need help from your insurance provider.
  • As a repair shop, the cars you own and the cars your customers bring in are not covered under the same policy, so make sure to get comprehensive insurance to cover all cases.

If you’re ready to learn more about auto repair business insurance, it’s time to get in touch with a knowledgeable rep here at Zuma . We’ll take the pain and hassle out of finding the right insurance policies by providing you with all the information you need to make the best possible choice, as well as fair rates to help you maintain your policies without burdening your bank account. Sound good? Just give us a call at 866-400-4434 or request a quote online.