Question

Big Jim's Auto Sales & Service has a Garage Policy with a $100,000 Liability (Symbol #21) policy. They also have Garagekeepers coverage with a $40,000 limit and a $100 Comprehensive deductible and a $500 Collision deductible. One night a customer brings a car in for repairs and leaves it parked and locked outside the repair shop as part of its "Night Owl" drop off service. An unknown driver loses control of his car, hits the customer's car and leaves the scene. Damage to the customer's car is $1,500. What, if anything, would be payable by the Garage Policy for this claim?

(A) $1,400 from the Garagekeepers section of the policy.

(B) $1,500 from the liability section of the policy

(C) Nothing. The garage was not negligent.

(D) $1,000 from the Garagekeepers coverage

Answer 1

The insurance would pay $1,000 from the Garagekeepers coverage, which is the total damage of $1,500 minus the $500 collision deductible.

Step-by-step explanation:

The damage to the customer's car, parked and locked outside the repair shop, would likely be covered under the Garagekeepers coverage of Big Jim's Auto Sales & Service's Garage Policy. Since the damage to the car is $1,500 and falls under the category of collision—where the known driver hit the parked car and left the scene—the collision deductible of $500 would apply. This means that the insurance would cover the damage minus the deductible. So, the insurance payment would be the total damage of $1,500 minus the $500 collision deductible, resulting in a payout of $1,000 from the Garagekeepers coverage.