Garage Keeper / Flood / GL / BPP which One Pays?

[Milkman1265]

Here's a scenario for discussion...

Insured;

Used car shop near water. Has 25 cars on his lot. 5 cars are his that he bought out right to resell. 20 cars are client's car that he resells on contingent. (He allows them to keep it on his lot and if he sells, he makes a cut). 10/20 of those client's car are being detailed by a detailing company that he hired which are kept in the lot overnight, but detailing company has access to the cars to move to desire location on premises and to detail it.

Peril/Damage;

Hurricane Sandy comes by with 4ft of salt water and floods his lot all cars, are total loss.

Which coverage will pay for what and what is he liable for?

 

[djs]

This is actually a trick question.

Sandy is an act of nature/God, so no liability assessed, meaning..... get ready for this.......

The 20 cars he doesn't own are covered by the vehicle OWNERS comprehensive coverage. Someone warned them of this risk, right? Unless there is something that the lot owner should have done and didn't to avoid the flooding (unlikely). The other thing to check is the contingency contract and make sure the dealer didn't assume liability for the cars. Unlikely, but stupid things happen.

The 5 cars are covered under the businesses dealer policy. Not garage keepers (wasn't someone elses car), not general liability, but his business policy where he elected to have the cars the dealer owned covered. Not all dealers have this coverage, strangely enough, but most do.

The detailing business is just noise in the wind. They didn't cause Sandy and unless they left windows open in a car that caused the car to get damaged, its not an issue.

Dan

 

[Milkman1265]

whoa, wait a minute. Flood has an act of god exclusion as well? or flood can only be applied to REAL property (the building)

No contracts in place, just owners are usually friend's or some mutual associates introductions.

They leave their car there hoping for it to sell.

This actually did happen, 7 blocks away from my home. I know the owner and i have been trying to convince him to buy insurance. He didnt have ANY insurance to begin with.

He is with most of the car owners on a pay back plan, out of good faith i guess, or something between them.

 

[djs]

Somebody can double check this, but flood policies won't cover vehicles that he doesn't own. Business personal property, maybe, if you have the coverage. Structure, yes. Vehicles? I don't think there is coverage, especially if not owned by the company.

Unlike property, normally comp coverage on an auto policy covers floods. Never really thought that one through before on a flood policy.

Dan

 

[1manshow]

Garage keepers, written on a direct primary basis would have provided coverage for customers autos in his care and custody...irregardless of his liability or negligence. His "owned autos" would need to have been listed under the "garage owned autos" portion.

Too bad he didn't see the value of insurance. Compared to what he pays back for the damaged cars, garage insurance will seem like a huge value.

 

[Milkman1265]

He's considering it with me now, but he say he doesnt have any money to buy insurance because he is paying back the cars.

I am trying to work with him on getting some coverage but he tells me it's too late already.

The vehicle that he doesn't own, i guess he can argue he did own it at one point... his business holds all the titles that are signed. He "Floats" the title over when it sells.