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Understanding the Cost of Garage Insurance: What Influences Premiums?

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Understanding the Cost of Garage Insurance: What Influences Premiums?


Looking to understand what influences garage insurance cost? Let’s break it down simply:

  • Type of Work: The specific services you offer, like repairs or detailing.
  • Coverage Needs: Depending on your business, you might need different types of coverage.
  • Claims History: A history of claims can increase costs.
  • Location: Your business’s location significantly affects premiums.

Insuring your garage or auto business is crucial. One misplaced tool or a slippery floor can lead to significant accidents. Without proper insurance, such incidents could financially cripple your business. Knowing the factors that drive garage insurance cost can help you make smarter decisions.

I’m Ryan McEachron, CEO of ISU Insurance Services ARMAC Agency. With over two decades in the insurance industry and deep community ties, I’m here to make understanding garage insurance cost straightforward for you.

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What is Garage Insurance?

Garage insurance is a must-have for any business in the automotive industry, covering a range of risks that can arise from daily operations. Let’s break down the main types of coverage included:

Garage Liability Insurance

Garage liability insurance protects your business from claims of bodily injury and property damage. For instance, if a customer slips on an oil spill in your shop, this insurance covers medical expenses and legal fees.

Key Points:

  • Covers: Bodily injury, property damage, legal defense costs
  • Doesn’t Cover: Customer vehicles (that’s where garagekeepers insurance comes in)

Garagekeepers Insurance

Garagekeepers insurance covers damage to your customers’ vehicles while they are in your care. Whether a car is in your shop for repairs or parked overnight, this policy has you covered.

Key Points:

  • Covers: Fire, theft, vandalism, extreme weather, accidental damage
  • Doesn’t Cover: Faulty service, parts, employee theft, personal items inside the vehicle

Commercial Auto Insurance

Commercial auto insurance is essential if your business owns and operates vehicles. It covers accidents, property damage, and bodily injury involving your company vehicles.

Key Points:

  • Covers: Business-owned vehicles, liability, physical damage
  • Doesn’t Cover: Customer vehicles (covered by garagekeepers insurance)

Commercial Property Insurance

Commercial property insurance protects your physical assets, like your building, equipment, and inventory. If a fire or natural disaster strikes, this policy helps you recover.

Key Points:

  • Covers: Buildings, equipment, tools, inventory
  • Doesn’t Cover: Customer vehicles, employee property, pollution-related damage

Understanding these types of coverage helps you choose the right policies to protect your business from various risks. Each type of insurance addresses different needs, ensuring comprehensive protection for your garage operations.

Next, let’s dive into the factors that influence garage insurance costs.

Factors Influencing Garage Insurance Cost

When it comes to garage insurance cost, several factors can influence what you pay. Understanding these factors can help you manage your expenses and ensure you get the right protection for your business. Let’s break down the key elements:


Where your business is located plays a significant role in determining your insurance costs. For example, if your garage is in a high-crime area or a region prone to severe weather, expect higher premiums.

Example: A garage in coastal Mississippi may face higher premiums due to the increased risk of weather-related claims, such as hurricanes.

location factors - garage insurance cost

Business Size

The size of your business, including the number of employees and the physical size of your garage, impacts your insurance costs. Larger businesses often face higher premiums because they have more assets to protect and potentially more liabilities.

Fact: A larger auto repair shop with multiple service bays and a higher volume of customers will generally pay more for insurance than a small, single-bay operation.


Your annual revenue also affects your insurance premiums. Higher revenue can lead to higher premiums because it often correlates with a higher volume of customers and increased risk.

Statistic: Repair shops with higher annual revenues typically handle more vehicles, which increases the likelihood of claims and thus raises the insurance cost.

Claims History

Your claims history is a critical factor. Insurers look at your past claims to assess risk. A clean claims history can help lower your premiums, while frequent claims can increase them.

Case Study: A repair shop with a recent $28,000 claim will likely pay more for insurance than a similar business with no claims. Keeping a clean claims history is crucial for securing lower rates.

Coverage Limits

The amount of coverage you choose directly impacts your premium. Higher coverage limits mean higher premiums but offer more protection. Balancing your coverage needs with your budget is key.

Tip: Opt for higher limits if your business handles expensive vehicles or has a high customer turnover. This provides better protection against potential large claims.

coverage limits - garage insurance cost

Summary Table

FactorImpact on Premiums
LocationHigher in high-crime or severe weather areas
Business SizeLarger businesses pay more
RevenueHigher revenue can lead to higher premiums
Claims HistoryMore claims result in higher premiums
Coverage LimitsHigher limits mean higher premiums

Understanding these factors helps you make informed decisions about your garage insurance. In the next section, we’ll explore the different types of coverage and their costs.

Types of Coverage and Their Costs

Garage Liability Insurance

Garage liability insurance is essential for protecting your business from general risks. This includes bodily injuries and property damage that occur on your premises or as a result of your services.

Coverage Amount: Typically, businesses can choose coverage limits ranging from $500,000 to $1,000,000 or more, depending on their needs. Higher coverage amounts offer more protection but come with increased premiums.

Typical Deductible: Deductibles for garage liability insurance usually range from $500 to $1,000. A higher deductible can lower your premium but means you’ll pay more out-of-pocket if a claim arises.

Garagekeepers Insurance

Garagekeepers insurance covers damage to customers’ vehicles while they are in your care, custody, or control. This is crucial for businesses like repair shops, parking garages, and dealerships.

Coverage Amount: Coverage can range from $50,000 to $1,000,000 or more. The specific amount depends on the value of the vehicles you typically handle and the level of risk associated with your business.

Typical Deductible: Deductibles for garagekeepers insurance generally range from $250 to $1,000. Opting for a higher deductible can reduce your premium but increases your out-of-pocket expense in the event of a claim.

Commercial Auto Insurance

Commercial auto insurance is necessary if your business owns and operates vehicles. It covers liability and physical damage for business-owned vehicles.

Coverage Amount: Coverage limits vary widely, typically starting at $100,000 and going up to $1,000,000 or more. The amount you choose should reflect the value of your vehicles and the potential risks involved in your operations.

Typical Deductible: Deductibles for commercial auto insurance often range from $500 to $1,000. As with other types of insurance, a higher deductible can lower your premium but increases your financial responsibility in the event of a claim.

Commercial Property Insurance

Commercial property insurance protects your business’s physical assets, including buildings, equipment, and inventory, from risks like fire, theft, and vandalism.

Coverage Amount: The coverage amount should reflect the total value of your business property. This can range from $100,000 to several million dollars, depending on the size and scope of your operations.

Typical Deductible: Deductibles for commercial property insurance generally range from $500 to $2,500. Choosing a higher deductible can reduce your premium but means you’ll pay more out-of-pocket if you need to file a claim.

Understanding these types of coverage and their costs helps you choose the right insurance for your garage business. Next, we’ll compare garage insurance costs across different states.

Comparing Garage Insurance Costs Across Different States

Garage insurance costs can vary widely depending on the state where your business operates. Let’s look at the differences in California, Texas, Florida, and New York.


California is known for its high cost of living, and this extends to garage insurance as well. Due to the state’s stringent regulations and higher risk of natural disasters like earthquakes and wildfires, premiums tend to be on the higher side.

For example, a garage in Los Angeles might pay more for coverage compared to a similar business in a less risky area. According to ISU Armac, the average annual cost for garage insurance in California is around $2,500 to $3,500.


In Texas, garage insurance premiums are generally lower than in California. However, the state has its own unique risks, such as hurricanes and flooding, especially in coastal areas like Houston.

A garage in Dallas might see annual premiums ranging from $1,800 to $2,800. The cost can be influenced by factors like the size of the business and its claims history.


Florida also faces high insurance premiums, primarily due to the risk of hurricanes and flooding. Garage businesses in cities like Miami and Tampa need to factor in these risks when choosing their coverage.

The average annual premium for garage insurance in Florida typically falls between $2,200 and $3,200. Businesses in high-risk areas may see even higher costs.

New York

New York presents a mixed bag when it comes to garage insurance costs. While urban areas like New York City have higher premiums due to the dense population and higher risk of accidents, rural areas in upstate New York may have lower costs.

On average, a garage in New York City might pay between $2,500 and $3,500 annually, while a similar business in a less populated area could see premiums from $1,700 to $2,700.

Summary Table

StateAverage Annual PremiumKey Risk Factors
California$2,500 – $3,500Earthquakes, wildfires, high regulation
Texas$1,800 – $2,800Hurricanes, flooding
Florida$2,200 – $3,200Hurricanes, flooding
New York$1,700 – $3,500Dense population, varied by location

Understanding the garage insurance cost in different states can help you budget better and choose the right coverage for your business. Next, we’ll explore ways to reduce your garage insurance costs.

How to Reduce Your Garage Insurance Cost

Reducing your garage insurance cost doesn’t have to mean sacrificing coverage. Here are some practical strategies to help you save:

Risk Management

Prevent to save: Implementing a solid risk management plan can significantly lower your insurance costs. Training employees on safety practices, maintaining property and equipment, and regularly inspecting your premises can minimize accidents and claims.

For example, an auto repair shop that conducts regular safety drills and equipment checks might see fewer accidents, leading to lower premiums.

Safety Measures

Safety first: A clean claims history can reduce your insurance costs. Encourage safe business practices to avoid accidents and claims.

  • Install security systems
  • Use proper signage to warn about hazards
  • Ensure good lighting in all areas

These measures can make your business a lower risk in the eyes of insurers, potentially lowering your premiums.


Pay more upfront, save later: Opting for a higher deductible can reduce your premium. A deductible is the amount you pay out-of-pocket before insurance kicks in.

For instance, if you choose a $1,000 deductible instead of a $500 one, your annual premium might be lower. Just make sure you can afford the higher out-of-pocket cost if you need to file a claim.

Bundle Policies

Combine and save: Bundling multiple insurance policies with the same provider can lead to discounts. For example, combining your general liability insurance with commercial property insurance into a Business Owner’s Policy (BOP) often costs less than buying separate policies.

By bundling, you get comprehensive coverage and a price break, making it a cost-effective option.

Implementing these strategies can help you manage and reduce your garage insurance cost. Next, we’ll answer some frequently asked questions about garage insurance.

Frequently Asked Questions about Garage Insurance

What is the difference between general liability and garage liability?

General liability insurance covers injuries and property damage accidentally caused to others. For example, if you accidentally damage a client’s property while visiting their home, general liability insurance would cover the costs.

Garage liability insurance, on the other hand, is tailored for businesses in the automotive industry. It covers injuries and property damage specific to auto service businesses. For instance, if a customer slips on leaked motor oil in your garage, their medical bills would be covered under garage liability insurance.

How does garagekeepers legal liability work?

Garagekeepers legal liability covers your customer’s vehicle while it is under your care. This is crucial for businesses like auto repair shops, car washes, and towing companies.

For example, if someone breaks into your shop and vandalizes a customer’s car, garagekeepers insurance would cover the repair costs. It also covers damage from fire, theft, severe weather, and other accidental damage while the vehicle is in your custody.

Can you insure just a garage?

Yes, you can insure just a garage. Garage insurance policies can be tailored to cover only the specific needs of your garage operations. This includes coverage for the building, tools, equipment, and customer vehicles in your care.

By working with an insurance agent, you can customize a policy that fits your garage’s unique needs and budget. This ensures that you have the right protection without paying for unnecessary coverage.

By understanding these key aspects of garage insurance, you can make informed decisions about the coverage that best suits your business needs. Next, we will explore how garage insurance costs vary across different states.


At ISU Armac, we understand that navigating garage insurance can be complex. That’s why we are committed to providing tailored insurance solutions that meet the specific needs of your automotive business. Whether you run a small repair shop, a bustling dealership, or a specialized service center, we have the expertise to help you find the right coverage.

Tailored Insurance Solutions

Every garage business is unique, and so are its insurance needs. Our team of experienced agents works closely with you to identify the risks your business faces and customize a policy that offers comprehensive protection. From garage liability insurance to commercial auto insurance, we ensure you have the coverage you need without paying for what you don’t.

We also offer additional coverages like workers’ compensation and commercial property insurance to provide a safety net for your employees and physical assets. By bundling different types of insurance, you can often save on premiums while ensuring robust protection.

Contact Us

Ready to secure your business with the right garage insurance? Our team at ISU Armac is here to help. We offer personalized consultations to assess your needs and provide accurate quotes.

Contact us today to learn more about our comprehensive insurance solutions and how we can help you safeguard your business.

Protect your automotive business with confidence. Let ISU Armac be your trusted partner in navigating the complexities of garage insurance.

By choosing ISU Armac, you’re not just getting an insurance policy; you’re gaining a partner dedicated to your business’s growth and security. Let’s work together to ensure that your garage is protected from unforeseen risks, allowing you to focus on what you do best—serving your customers and growing your business.