Garage Keepers Insurance Law

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AASP/NJ Applauds New Garage Keepers’ Insurance Law

The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) is proud to announce the passage of a new law that eliminates the requirement that collision shops purchase more insurance than often they need in order to maintain an auto body repair license in the state. Previously, all New Jersey collision shops needed to carry $300,000 in garage keepers’ insurance, regardless of whether or not the size of their business required this amount, Under the new law, this amount has been lowered to $50,000.

Effective immediately, the following amendments apply to the insurance coverage requirements for damage to property and for liability arising from bodily injury, which an auto body repair facility must maintain for a full service license:

• Full service license auto body facilities shall maintain insurance coverage for damage to property and for liability arising from bodily injury, including, but not limited to: eligible garage liability or equivalent commercial general liability insurance in a minimum amount of $300,000 or a letter of credit in the amount of $300,000; garage keepers’ liability insurance in a minimum amount of $50,000 or a letter of credit in the amount of $50,000.
• Limited full service license applicants and licensees must also comply with these requirements.

“It was AASP/NJ that first prompted the legislation to correct the problem of the insurance requirement in the licensing law,” says ASP/NJ Executive Director Charles Bryant. “Members of AASP/NJ attended numerous hearings to make sure the legislation did not get derailed and got passed. It is amazing that it took so long to get this legislation through, because no one was opposed to it. Even the Professional Insurance Agents came out to some of the hearings to support the legislation.”

Bryant adds that the change in the insurance requirement will have a substantial impact on the state’s Auto Body Licensing Law.

“This will make the law fair to the shops by not forcing a small shop to purchase more insurance than it needs,” he says. “This saves the smaller shops a lot of money,”

Questions regarding the new law may be directed to the Business Licensing Services Bureau at (609) 292-6500, ext. 5014.

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