The call came at 3 AM: the restoration shop holding my disassembled E-Type Jag was an inferno. The shop owner was in tears, admitting his Garagekeepers Liability policy only covered $200,000 total for all customer cars inside—and there were 15 cars in there. My chassis was melted, my rare engine block cracked, and my personal insurance agent just asked, “Was it garaged at your home address?”
Key Takeaways
- Garagekeepers Liability is Weak: Most shops are underinsured. If they burn down, their policy pays pennies on the dollar to split among all victims.
- “Under Restoration” Coverage: You need a specific endorsement on your policy that covers the car while it is away from your garage at a shop.
- Parts Coverage: A disassembled car is harder to insure. You need to document every box of parts.
- No Subrogation: If you rely on the shop’s insurance, you are at the mercy of their legal defense. Rely on your own policy.
The “Why” (The Trap): Care, Custody, and Control
Your standard classic policy usually requires the car to be stored in a “locked, private garage” at your residence.
Once you move it to a commercial shop, the risk profile changes. If you didn’t notify your carrier, they can deny the claim due to “Material Change in Risk.”
Furthermore, standard policies often exclude loose parts that aren’t attached to the vehicle.
[IMAGE: Diagram showing the coverage gap between Shop Insurance Limits and Customer Car Values]
The Investigation: I Called Them
I investigated how carriers handle a car in pieces at a third-party shop.
1. Hagerty
- The Solution: “Restoration Coverage.”
- The Details: You update the status to “In Restoration.” Coverage increases by 10% automatically to account for value added during the work.
- My Verdict: Essential. They understand the car is in pieces and cover the parts and the shell.
2. American Modern (AMIG)
- The Solution: They allow shop storage but require the address to be listed.
- The Pro: Good coverage for “Spare Parts” if listed separately.
- My Verdict: Good, but you must be proactive in updating the location.
3. General Auto (Geico/Progressive)
- The Response: “We cover the car.”
- The Catch: When I mentioned the car was disassembled, they flagged it. A car that cannot be driven is often ineligible for standard auto policies.
- My Verdict: They will likely cancel your policy if they find out it’s a “basket case” in a shop.
Comparison Table
| Scenario | Shop’s Insurance | Your “Restoration” Policy | Standard Auto Policy |
| Shop burns down | Splits limit among all cars (Low payout) | Pays your full Agreed Value | Might deny (Wrong Location) |
| Mechanic damages car | Covered (Usually) | Covered | Covered |
| Theft of loose parts | Excluded | Covered | Excluded |
| Value Increases | No | Yes (Quarterly adjustments) | No |
Step-by-Step Action Plan
- Update Location: Call your insurer immediately and list the restoration shop’s address as the “Garaging Location.”
- Ask for “Restoration” Rider: Specifically ask for coverage that includes “parts not attached to the vehicle.”
- Check Shop’s COI: Demand to see the shop’s “Certificate of Insurance.” Look for “Garagekeepers Legal Liability.” If the limit is under $1M, run.
- Document Progress: Every time you pay a bill for bodywork, scan it. That bill increases the value of the car. Increase your Agreed Value every 6 months.
FAQ Section
What if the shop goes bankrupt and locks my car inside?
This is a legal battle, not usually an insurance claim (unless you have “Title” insurance). You need a lawyer to file a writ of replevin.
Does insurance cover the cost of the restoration work itself?
No. If the mechanic does a bad paint job, that is a workmanship dispute. Insurance covers physical damage (fire, theft, dropping the car), not bad quality.
Can I insure a car that is just a pile of parts?
Yes, specialty carriers like Hagerty and Grundy will insure a “project” under a restoration policy, usually for a lower premium since it’s not being driven.