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Insurance for auto repair shops — what to carry, and what it costs

Published 2026-06-05 · Updated 2026-06-11 · by Brokly

Direct answer: insurance for auto repair shops starts with workers’ comp — required in nearly all states — with 5 more coverages matched to the trade below. For a typical repair shop that’s ≈$690 to ≈$4.2k/yr depending on the state (filed rates $0.76–$5.19/$100 payroll, 2024).
Pick your state — the statute, modeled costs, and the full coverage guide ↓

What auto repair shops carry — at a glance

Workers’ comp is governed state by state — pick your state in the table below for the statute and the modeled cost. The rest is the trade’s exposure map.

Workers' compensation

Protects your team if they're hurt at work.

Typically covers

  • Medical bills for a work injury, at rates the state sets
  • Part of the injured employee's lost wages
  • The employer too: covered employees generally can't sue over the injury

Typically doesn’t

  • Injuries outside work
  • Independent contractors, in most states
  • Lawsuits that get around the can't-sue trade-off — that's the employer's liability part of the same policy
Required in nearly all states≈$1.6k/yrtypical repair shop · median stateCosts by state →
Commercial auto

Covers shop vehicles and customer test-drives.

Typically covers

  • Liability when a business vehicle injures someone or damages property
  • Accidents in vehicles titled to the business, driven by employees for work
  • The liability minimums states set for business vehicles

Typically doesn’t

  • Your liability when employees drive their own cars for work — that's hired and non-owned auto; the employee's own car stays on their personal policy
  • The freight or goods being hauled — that's cargo or inland marine coverage
  • Damage to your own vehicle, unless physical damage coverage is added
Required if…Requirements by state →
General liability

A customer hurt on-site — or a finished repair that fails later.

Typically covers

  • Injuries to customers, visitors, and other third parties
  • Damage your operations cause to someone else's property
  • Legal defense for covered claims

Typically doesn’t

  • Your employees' injuries — that's workers' compensation
  • Mistakes in professional advice or design — that's professional liability
  • Redoing your own faulty workmanship itself
Worth a lookWhat it covers →
Garagekeepers

Customer cars in your care or being serviced.

Typically covers

  • Customers' vehicles in your care — on the lot, on the lift
  • Fire, theft, vandalism, and collision damage to those vehicles, per the form
  • The gap general liability leaves for customers' cars in your care

Typically doesn’t

  • The faulty repair work itself
  • Customers' belongings left in vehicles, typically
  • Your own business vehicles — that's commercial auto
Worth a lookWhat it covers →
Tools & equipment

Your diagnostic gear and tools, in the shop or on the road.

Typically covers

  • Tools and equipment that travel — in trucks, on job sites, between locations
  • Theft from a vehicle or job site, a common loss
  • Rented or borrowed gear, when it's listed on the policy

Typically doesn’t

  • Gradual wear and breakdown
  • Tools that stay at your shop — that's commercial property
  • The vehicles themselves
Worth a lookWhat it covers →
Business owner's policy

Property, liability, and lost income in one bundle.

Typically covers

Typically doesn’t

  • Vehicles — that's commercial auto
  • Workers' comp, which is written as its own policy
  • Professional advice claims — that's professional liability
Worth a lookWhat it covers →

Exact terms live in the policy — these are the typical boundaries.

Sources: NAIC — Small Business Insurance (retrieved 2026-06-06) · California Department of Insurance — Commercial Insurance Guide (retrieved 2026-06-06) · Oregon DAS Risk Management — Insurance Clauses: Garage Insurance (retrieved 2026-06-06)

Workers’ compCommercial auto · benchmark comingGeneral liability · benchmark comingGaragekeepers · benchmark comingTools & equipment · benchmark comingBusiness owner's policy · benchmark coming

What workers’ comp costs a typical repair shop

Modeled annual premium for each state’s most common repair shop size, from that state’s own filed rate and observed payroll. All 51 states: rates & costs →

Least expensive states

Most expensive states

Modeled — not quotes: each figure prices that state’s most common repair shop size band from the state’s own observed payroll (CBP 2023), so dollar order can differ from rate rank.

Pick your state — what’s required there, and what it costs

Every linked state has the full guide: what the law requires there, the coverages that fit, and modeled costs — built from 71,481 auto repair shops across 31 states (CBP 2023).

† state-fund jurisdiction — workers’ comp is purchased through the state, not a private market. Unlinked states lack a published rate or a defensible business-size cohort.

Sources: Oregon DCBS workers' compensation premium rate ranking study, June 2025 (calendar-year 2024 rates) (as of calendar year 2024, retrieved 2026-06-04) · US Census County Business Patterns 2023, state file (General automotive repair (NAICS 811111)) (as of 2023, retrieved 2026-06-05)

Frequently asked questions

What work does class 8380 cover?

Auto service and repair work is NCCI class 8380 — mechanical repair and service centers, including their drivers.

Why does my state matter so much?

Workers’ comp is state law — the employee threshold that triggers it, the rates, and the market structure all differ by state. That’s why every state above gets its own guide.

Someone asked me for a certificate of insurance — what is it?

The one-page proof your coverage exists — landlords, general contractors, and client contracts ask for it routinely, and it’s often the reason auto repair shops buy insurance in the first place. Certificate of insurance, explained →

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