Who Pays for Car Damage that Happens at the Body Shop?
UPDATED: June 19, 2018
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Many of us have left our vehicles in the care, custody and control of an auto shop over night or have allowed a mechanic to test drive our car. In the event anything happens to the car while at the mechanic you need to know who is responsible for paying for the repairs. Because of a hold harmless agreement, the repair shop is not always liable for damages or vandalism to the car. Make sure you know what you are agreeing to and what a mechanic will pay for before you trust one with your vehicle.
Auto Repair Shop Liability
Auto liability coverage section in a mechanic's insurance policy pays for damages to a customer's vehicle which the repair shop is liable for causing. However, if a random act of vandalism or damage to your car (i.e., a light pole falls on your car while on their lot) occurs while at the repair shop, the mechanic may not be considered liable. If the shop did not contribute to the damage by either causing it directly or leaving the car in a situation where vanadlism was easy or even likely, then the mechanic's insurance policy may not have to pay your claim.
If the repair shop is not responsible for the damage, then your own car insurance must pick up the bill unless the auto shop has expanded its insurance to cover any damage to vehicles in its custody and control. With expanded coverage the mechanic will likely pay for the repairs to your car regardles of what happened. Without it, the auto shop will only pay if it contributed to the damage. You are entitled to ask the auto repair shop what its insurance covers and what security measures it puts in place to protect your vehicle so you can make sure you are comfortable leaving your car. The best way to avoid the situation is to be cautious and prevent it from happening by only using trusted and safe auto mechanics.
Hold Harmless Agreements
Hold harmless agreements are another way out of paying for damage for auto mechanics and repair shops that want to push the coverage for any damage to your vehicle back to your policy. A hold harmless agreement states that you will not hold the auto repair shop liable for anything that happens to your car while it is there. Once signed, a hold harmless agreement, which can be as small as one or two sentences in fine print found at the bottom of a repair agreement, releases the auto repair shop from any liability.
Rules pertaining to hold harmless agreements can vary depending on the state law. In fact, some states only require that shops post a sign saying "we are not responsible for theft or loss of property for vehicles left at this location" in order to avoid liability. Others require you to specifically sign an agreement.
You will need to discuss the auto shop's insurance policy to find out what it covers, specifically asking if it covers customer's vehicles in its custody and control.
Suing the Auto Repair Shop
If there were neither a hold harmless release nor a sign disclaiming liability, then you may be able to take the auto body shop to court if they do not agree to cover a claim through their business insurance. Be prepared to prove that you didn't release them from liability and be prepared to show how much it will cost to repair the damage. In the event that they have no insurance that would cover the damage to your vehicle, your insurance company may pay to repair the damage and then subrogate against the auto repair shop if there was any negligence on their part. If you decide to go after an auto repair shop for damages to your car, you should have the advice of an experienced car insurance attorney before taking action.