If a technician crashes a customer’s car during a test drive, standard garage liability insurance will generally cover the damage caused to the other driver’s vehicle and any resulting injuries. However, to cover the physical damage to your customer’s car, your Pennsylvania shop must have garagekeepers liability insurance with collision coverage.
How Test Drive Accidents Are Handled in Pennsylvania
The Role of Garage Liability: If your mechanic runs a red light during a diagnostic test drive and hits another vehicle, the garage liability portion of your policy handles the third-party claims. It pays for the other driver’s medical bills and vehicle repairs.
The Role of Garagekeepers: Garage liability will not pay to fix the customer’s car that your mechanic was driving. That is where garagekeepers collision coverage comes in, paying to repair or replace the customer’s vehicle while it was in your shop’s control.
Employee Driving Records Matter: Insurance carriers closely monitor the risk associated with the people behind the wheel. Employing technicians with clean Motor Vehicle Records (MVRs) helps keep your premiums manageable, as frequent test-drive accidents can cause rates to spike.
What should you do next?
If you are reviewing your policy, make sure you aren’t overpaying or leaving yourself exposed. Check out the complete list of common questions at our Pennsylvania Business Insurance FAQs, or request a quick, no-pressure policy review to see if we can improve your coverage.