Why Auto Repair Shops Get Declined for Insurance Coverage
- Nate Jones, CPCU, ARM, CLCS, AU
- 2 days ago
- 2 min read
It can be frustrating for auto repair shop owners to request an auto service business insurance quote only to discover that the insurance company declines to offer coverage. Auto repair businesses face higher‑than‑average risk exposures, which makes carriers more selective about which shops they insure. Understanding the main reasons for declination can help you avoid setbacks and secure affordable auto repair business insurance without delays.
Whether you run a general auto repair shop, transmission shop, engine rebuild facility, tire shop, or mobile mechanic service, knowing what carriers look for can help you qualify for better policies and pricing.
1. Poor or Incomplete Safety Practices
Insurance companies closely evaluate safety protocols before approving coverage. Shops with outdated or missing safety measures, such as poor ventilation, lack of fire suppression, inadequate chemical handling, or unorganised work areas, are at higher risk for injuries and property damage. Carriers may decline shops that cannot demonstrate consistent safety controls.
Implementing clean, organised processes and routine training helps reduce risks and makes your shop more insurable.
2. Inaccurate or Missing Business Information
During the quoting process, carriers require detailed operational information, including services performed, employee count, payroll, building details, equipment values, and customer vehicle storage practices. When insurance providers receive incomplete or inaccurate data, they often decline the application altogether.
Preparing this information ahead of time makes it easier to qualify for coverage and ensures accurate pricing.
3. High‑Risk Services Without Proper Controls
Some repair services carry higher risks, welding, fabrication, transmission swaps, performance tuning, engine rebuilds, and electrical diagnostics. Carriers may decline shops performing these services if there are no proper risk‑management controls in place.
Shops that clearly document procedures and equipment safety protocols are more likely to be approved for auto repair business insurance.
4. Poor Claims History
A history of frequent claims, especially involving Garage Liability or Garage Keepers losses, signals high exposure. Carriers may decline auto repair shops with repeated fire, theft, vandalism, or faulty workmanship claims. Demonstrating corrective actions can help rebuild your insurability.
5. Property Risks or Building Conditions
Shops located in older buildings, high‑crime areas, or properties with inadequate fire protection (such as no sprinklers) are commonly declined. Carriers also evaluate building structure, electrical systems, and overall condition.
Improving property safety can significantly improve your chances of approval.
How Wexford Insurance Helps Auto Repair Shops Get Approved
Many insurance agencies do not specialise in auto repair risks, meaning they may only work with carriers that decline these businesses. Wexford Insurance partners with companies that insure auto repair shops nationwide, even those with higher‑than‑average risks or previous claim issues.
We help you understand carrier requirements, prepare the necessary information, and match you with the best insurer for your operation.
👉 Request your auto service business insurance quote from Wexford Insurance and get help securing coverage, even if your shop has been declined before.
