Whether you specialize in oil changes and maintenance or full engine and bodywork rebuilds, a flood can put you and your employees out of work indefinitely. Attorney Bill Voss examines the unique insurance needs of mechanics and body shop owners, including how to fill coverage gaps and maximize flood loss claims.
Essential Flood Coverage Options for Auto Service and Body Shops
The first thing you need to know is that flooding from storm surges or a natural disaster is usually not covered by private insurers. If your business is 
located in a flood-prone area, you will need to secure a separate policy through the National Flood Insurance Program (NFIP).
Once you are covered for all types of flooding, you should read through your property damage policy to make sure your coverage is tailored to your specific needs. Depending on the types of services you offer, you may want to select endorsements such as:
- Special equipment coverage. Your insurer will only cover losses up to the policy limit, so that number must be high enough to fully compensate you for everything on the property. If your hydraulic lifts, compressors, tools, and other equipment cost more than your policy is worth, you may need increased coverage or separate deductibles for each item of machinery.
- Vehicle coverage. You will likely need two forms of vehicle insurance: one to protect the vehicles you own, and one to protect the vehicles that are on site for repair. Any business vehicles (or personal vehicles used for business purposes) should be covered under a comprehensive commercial policy to pay for non-crash losses. Any vehicles owned by someone else stored on your property should be covered by garagekeepers liability insurance.
- Ordinance and law. Once a structure has been damaged, the law requires that new construction will have to conform to current building codes. If your location was built over a decade ago, increased costs may include widening doorways or rewiring circuits—costs that are not covered under standard policies. Ordinance and law coverage can provide the payment you need for plumbing upgrades, increased costs of construction, and the expense of meeting new building regulations.
- Electrical damage. Flooding can cause extensive damage to computers, specialized lighting, and other costly electrical systems. Electrical coverage pays to replace any automatic cameras, locks, lights, and doors that cannot be repaired, and may cover the cost of rewiring damaged portions of the building.
- Biohazardous waste coverage. Waters from broken dams and overflowing rivers may already be contaminated, or they may pick up hazardous oils, grease, or gasoline as they flood your property. These added fluids may require special hazardous waste removal teams to pump out customer service areas, inspection pits, and oil tanks.
- Theft and vandalism. A large-scale flood can prevent you from returning to your shop until waters recede, opening the site up to potential looting or intruders. Theft and vandalism insurance may pay for increased video surveillance, alarm systems, or door locks to protect your inventory.
- Business interruption insurance. Even if your business can be salvaged, it may take weeks or months of rebuilding—during which time your doors may be closed to the public. Business interruption insurance replaces the income you will lose during the period of restoration, giving you the funds you need to pay your employees, inform and reassure the public of your business’s return, open a temporary business location, or cover out-of-pocket costs.
- Total loss property damage. A flooding event may cause so much damage that it may be less expensive for the owner to go out of business than it is to make repairs. Total loss coverage provides enough compensation to cover the full value of the structure and inventory, allowing owners to start over without carrying the debt of the old business.
If you are struggling to get payment for flood damage, the Voss Law Firm can help you get the coverage you paid for. Simply fill out our contact form or start reading our free informative guide, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.
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