Factors That Impact Insurance Cost for an Auto Repair Business
- Nate Jones, CPCU, ARM, CLCS, AU
- 2 days ago
- 2 min read
Running an auto repair shop comes with many moving parts, customer vehicles, expensive tools, hazardous equipment, employees, and ongoing liability exposures. Because of this, it’s no surprise that the insurance cost for an auto repair business can vary significantly from one shop to another. Understanding what impacts your premium helps you budget properly and avoid overpaying for coverage.
Below are the most important factors insurance companies evaluate when determining the cost of auto repair business insurance.
1. Types of Services Your Auto Shop Performs
Insurance pricing begins with the type of work performed in your shop. Basic services like oil changes and tire rotations generally present lower risks. However, risk increases when your shop performs:
Engine rebuilding
Transmission repair
Welding
Electrical diagnostics
Performance upgrades
Fabrication work
Higher‑risk services can lead to higher premiums because they increase the likelihood of liability and property claims.
2. Number of Employees and Payroll Size
For policies like Workers’ Compensation, carriers look closely at how many technicians you employ, their job duties, and your total payroll. Auto repair work is classified as higher risk due to physical labour, tools, slips, falls, and potential injuries. The more employees you have, the more exposure an insurance company must account for.
3. Value of Tools, Equipment, and Property
Auto shops invest heavily in equipment such as lifts, diagnostic systems, air compressors, paint booths, and speciality tools. These values influence the cost of:
Business Equipment coverage
Shops with high‑value machinery typically pay more due to the cost of repairs or replacement in a claim.
4. Customer Vehicles in Your Care (Garage Keepers Exposure)
Insurance companies also consider how many customer vehicles your shop holds on‑site, especially overnight. Garage Keepers Insurance protects against fire, theft, vandalism, accidents, and more. Higher vehicle counts or high‑value vehicles will increase insurance pricing.
5. Claims History and Loss Experience
Your past insurance activity has a major impact on premiums. A clean history may qualify for better rates, while a record of frequent claims, especially garage liability or property losses, can increase your premium or limit which carriers will insure your shop.
6. Location of Your Auto Repair Shop
Your shop’s location affects insurance costs due to crime rates, weather risks, and population density. Areas with higher theft, vandalism, or severe weather exposure typically result in higher premiums.
Get a Competitive Quote From an Agency That Specialises in Auto Shops
Insurance for auto repair businesses is unique, and not all agencies or carriers understand the industry. Wexford Insurance works with companies that specialise in auto repair shops across the nation, helping you secure the best protection at the best price.
👉 Request your auto service business insurance quote from Wexford Insurance today and start saving while staying fully protected.
