Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Casualty InsuranceHard
A Florida auto repair shop offers complimentary loaner vehicles to its customers while their cars are being serviced. One of these loaner vehicles is involved in an accident while being driven by a customer, resulting in damage to the loaner vehicle itself and injury to a third party. The repair shop has a Garage Coverage Form policy. Which section of the policy would specifically cover the damage to the loaner vehicle?
- APhysical Damage Coverage (for the shop's own vehicles)
- BGaragekeepers Coverage
- CGarage Liability Coverage
- DDealers Physical Damage Coverage
Show answer & explanationAnswer & explanation
Correct answer: A. Physical Damage Coverage (for the shop's own vehicles)
The Garage Coverage Form includes Physical Damage Coverage for the insured's own vehicles, which would include their loaner vehicles. Garagekeepers Coverage is for damage to customers' vehicles while in the insured's care, custody, or control. This question asks about damage to the repair shop's own loaner vehicle, making Physical Damage Coverage the correct choice.
Why the other options are wrong
- B. Garagekeepers Coverage covers damage to customers' vehicles left with the insured, not the insured's own vehicles.
- C. Garage Liability covers bodily injury and property damage to third parties arising from garage operations, not damage to the shop's own property.
- D. Dealers Physical Damage is a specific type of Physical Damage Coverage for dealers' inventory, but 'Physical Damage Coverage' is the broader and more accurate term for the shop's owned vehicles.
Garage Coverage - Physical Damage
Covers damage to the garage business's own vehicles, including loaners, service vehicles, and vehicles held for sale.
- Similar to PAP physical damage for owned vehicles.
- Distinct from Garagekeepers, which covers customers' vehicles.
- Includes collision and comprehensive perils.
Memory trick: Garage: Custody for theirs, Physical for ours.