Auto Repair Insurance in Arizona

TCI Insurance Agencies provide auto repair insurance solutions to businesses in Arizona.

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What is auto repair insurance?

Auto repair insurance is a specialized form of business insurance designed to cover the unique risks faced by auto repair shops. This type of coverage typically includes protection for liability, property, tools and equipment, and employees. It helps shop owners in Arizona avoid costly legal fees, repair expenses, or medical bills that may arise from accidents, damage, or injuries related to their business operations.

Why do auto repair shops in Arizona need insurance?

Auto repair shops in Arizona need insurance to safeguard against the financial risks inherent in operating an automotive business. Insurance is essential for several reasons. First, accidental damage to customer vehicles during repairs can lead to costly claims, and auto repair insurance helps cover these expenses. Additionally, the nature of the work—handling heavy equipment and hazardous materials—poses a risk of employee injuries. Workers’ compensation insurance, often included in an auto repair insurance package, provides coverage for medical expenses and lost wages. 

Furthermore, businesses may face lawsuits from customers who believe their vehicles were improperly repaired or damaged. Liability insurance covers legal fees and settlements in such cases. Arizona is also prone to natural disasters like wildfires and flash floods, making property insurance crucial to protect the shop from damage caused by these events. Without comprehensive insurance, an auto repair shop could suffer significant financial hardship if any of these situations arise.

Auto Repair Insurance Arizona

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Auto Repair Insurance Arizona

What does auto repair insurance cover?

Auto repair insurance in Arizona typically covers a range of protections tailored to the specific needs of auto repair businesses. These coverages often include:

  1. General Liability Insurance: Covers claims of bodily injury or property damage caused by your business operations. For example, if a customer slips and falls in your shop, general liability insurance will cover the medical costs.
  2. Garage Liability Insurance: Specifically designed for auto repair shops, this insurance covers liability risks associated with repairing and servicing vehicles. It protects you from claims related to vehicle damage or injuries caused by faulty repairs.
  3. Garagekeepers Insurance: Provides protection if a customer’s vehicle is damaged while in your care, custody, or control. This is important for Arizona repair shops that store vehicles overnight or for extended periods.
  4. Commercial Property Insurance: Covers damage to your building, equipment, and inventory due to events like fire, theft, or natural disasters. This is crucial in Arizona, where flash floods or wildfires can cause significant property damage.
  5. Business Interruption Insurance: If your shop is forced to close temporarily due to a covered event, this insurance compensates for lost income and helps cover ongoing expenses like payroll.

  • In Arizona, subcontractors or temporary workers may not be automatically covered under standard auto repair insurance policies, which typically provide coverage for full-time employees. However, businesses can extend coverage to these workers by adding specific endorsements or purchasing additional policies like hired and non-owned auto liability insurance or workers’ compensation insurance, depending on the work they perform and the risk they pose.

  • In Arizona, auto body shop insurance policies typically do not cover personal items left inside customers’ vehicles under standard coverage. The standard garagekeepers liability insurance, which is often included in auto body shop policies, protects the vehicle itself while it’s in the shop’s care, custody, or control, but it usually excludes personal property inside the vehicle. However, some insurers may offer an endorsement or additional coverage that extends protection to customer items left in vehicles.

  • Yes, vehicles stored overnight at a repair shop in Arizona can be covered under a type of insurance known as garagekeepers liability insurance. This coverage is designed to protect customer vehicles that are in the shop’s care, custody, or control. It typically provides protection against damages caused by fire, theft, vandalism, or extreme weather events while the vehicles are stored at the shop.

    However, the specifics of coverage can vary depending on the policy. Some policies may have exclusions or limitations, so it’s important for auto repair shops to ensure their garagekeepers insurance includes adequate coverage for overnight storage, particularly if they regularly store vehicles on their premises. Adding additional security measures like alarms or surveillance systems may also help reduce risks and premiums.

  • Yes, auto repair shops in Arizona are generally required to have workers’ compensation insurance if they have one or more employees. This insurance is mandatory under Arizona state law and provides coverage for medical expenses, lost wages, and rehabilitation services for employees who are injured or become ill due to work-related activities.

    Even if the auto repair shop hires part-time or temporary workers, they still need to be covered under workers’ compensation. Failure to carry this insurance can lead to significant penalties and legal consequences for the business.

  • The cost of auto repair insurance in Arizona can vary based on several factors, including:

    1. Business Size and Revenue: Larger shops or those with higher revenues may face higher premiums due to the increased risk associated with more employees, equipment, and customer vehicles.
    2. Coverage Types and Limits: The specific types of coverage selected (e.g., general liability, garagekeepers insurance, workers’ compensation, commercial property insurance) and the policy limits will significantly impact the cost. Higher coverage limits result in higher premiums.
    3. Location: The location of the shop plays a role in determining insurance costs. Shops located in areas with higher crime rates or greater risks of natural disasters (e.g., flooding or wildfires) may pay more for insurance.
    4. Number of Employees: More employees mean higher workers’ compensation insurance costs, as well as a potentially higher risk of claims.
    5. Claims History: A business with a history of frequent claims or lawsuits may be seen as higher risk and face increased insurance premiums.
    6. Services Offered: Shops that offer higher-risk services, such as auto body repairs, painting, or customizations, might see higher premiums than those that only provide basic mechanical repairs.
    7. Equipment and Inventory: The value of the equipment and tools, as well as the number of customer vehicles stored at the shop, affects property and garagekeepers insurance costs.
    8. Deductibles: Choosing higher deductibles can lower the premium cost but requires the shop to pay more out of pocket in the event of a claim.

    These factors, along with others such as the shop’s years in business and reputation, will influence the overall cost of the insurance package.

TCI Insurance Agencies

How can auto repair shops obtain auto repair shop insurance?

Reach out to the independent agents at TCI Insurance Agencies for a fast quote on auto repair insurance in Arizona. With our expertise in the local market and deep understanding of the risks faced by auto repair businesses, we’ll help you find the best coverage tailored to your specific needs. Protect your shop from unexpected events, secure your livelihood, and enjoy peace of mind knowing that your business is safeguarded. 

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