The appraisal report on Brennan's Model A contained 10 more pages of photos just like this
"We don't require shops to report on each specific car coming in," Heckman explains. "We ask the shop owner how many cars are in the shop, and the cost to replace them in the event of a total loss. Maybe it's 10 cars, with an average value of $50,000-so you're looking at $500,000 of garage keeper's coverage. In the event of a claim or claims, the insurance company will determine the value of the individual cars by asking the owner how much coverage they had it insured for, or by looking at the shop's build records, and by our own expertise." This illustrates the importance of shops keeping a separate set of build records off-site. It also shows how an independent appraisal could come in handy.
Grundy's garage keeper's coverage is "direct primary," meaning that the shop's insurance company pays the car owner without involving the owner's insurer. This makes it convenient for the customer and shows integrity on the part of the shop.
Heckman told us that he's met many shop owners who don't carry garage keeper's coverage because their customers' cars are already covered by their own personal policies. That's a risky habit. If a customer's car does get damaged or destroyed in an uninsured builder's shop, the car owner's personal agreed value policy will cover the loss. The second part of that story, however, is that the car owner's insurance company can then invoke its "right of subrogation," and come after the shop owner to recoup the expense of the claim. That surprise visit can cost a shop owner a lot of money-and even potentially close him down.
After talking to all these insurance pros, we decided to get advice from another shop owner, for the viewpoint from the other side of the policy. Hollywood Hot Rods (HHR) has been in business for eight years, always with insurance, and so far with no claims or accidents. HHR has been covered by restorer and builder insurance from Grundy for three years. "Anywhere you've got a lot of cars in one place and a lot of activity, there is risk," HHR owner Troy Ladd says. "Stuff happens all the time. Not even big things like a fire, but small things like moving a car and hitting something or bumping into another car, opening the door into something or moving the cars into the shop at night. A hot rod shop is a small business with a very low profit margin, and the reality is that not every builder can afford as much insurance as he would like to have-but insure as much as you can as early as you can and increase it as you grow and can afford it. If something happened to a customer's car and you had to pay that back, you could lose your business. With insurance, you're protected against catastrophe, which is peace of mind for the builder and for his customers."