A body shop damages a customer’s car. Is there insurance coverage?

An employee of the insured business was negligently collided with a customer’s vehicle while in the care, custody and control of the insured. (Photo: Digiphoto / iStockphoto)

Every claim is different and some insurance policies can be difficult to interpret for unique situations. Interpretation of FC&S expert coverage, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it easy to find credible answers to your complex coverage questions. Analysis presented by our FC&S experts.

Editor’s Note: What happens when your car is damaged while you are at a body shop for repairs? Does your policy pay for damage or body shop coverage? We are exploring this situation this week Questions and answers.

Question: Our insured is a bodybuilder. While in care, custody and control of a customer’s car, which was being repaired, an employee recklessly and negligently slammed the car into the car.

The body shop has a commercial auto insurance policy (CA 00 01), which also has the garage owner coverage endorsement. The insured has not chosen direct primary coverage or direct deductible.

The customer is insured by a personal automobile insurance policy (PAP).

We have a few questions regarding insurance coverage for the incident involving the customer’s vehicle:

  1. Does the other insurance condition of policy CA 00 01 apply to this situation?
  2. Will the mechanic endorsement only cover a deductible against the customer’s PAP policy, even if the body shop was at fault? (The “other insurance” clause of the company’s auto insurance policy states that the insurance company will pay on an excess basis for non-owned cars.)
  3. Can the PAP policy insurance company retain its right of subrogation against the bodybuilder?
  4. Will the mechanics rider cover and pay for this subrogation even in the event of a deductible?

– Subscriber from Puerto Rico

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Justin D. O'Neill