Q

A carrier I represent is writing a garage liability policy Hazard I form on an auto repair shop. This repair shop does sell a few used cars throughout the year and it has dealer plates.

The carrier is charging the appropriate garage liability rate based upon rating units. However, they are scheduling owned autos used in the business (a parts truck and a wrecker) and they are making a separate liability charge for them.

I contend that the company is charging twice for a coverage automatically included in the Hazard I and they are not entitled to this additional premium; they contend they are. Please shed some light on this problem.

Illinois Subscriber

A

A garage liability policy that uses symbol 21 to identify autos covered for liability thereby identifies “any auto” as a subject of the coverage. Any auto instrumental in causing injury or damage charged to the insured is a covered auto.

Furthermore, the definition of “auto” in the garage liability contract is quite broad, broad enough certainly to include a parts truck and wrecker. Any schedule that would list these two vehicles additionally for liability coverage is redundant.

Covered yes but not so as to a schedule being “redundant” for a separate premium says a Maryland subscriber:

The schedule that supports a separate premium charge for owned or hired vehicles merely recognizes that the rating formula for the garage exposure cannot address the variety of owned vehicle exposures in nondealer risks. Even though this insured “does sell a few used cars throughout the year,” the operation is described by the Illinois subscriber as a repair shop and the Insurance Services Office commercial lines manual specifies that owned or hired autos operated by repair shops must be rated for their appropriate classifications (rule 51, page CA-37).