Written by Michael Foote, Insurance Expert
Michael Foote is the founder of Quote Goat and has over 20 years experience working in finance & insurance. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city.
What Happens If a Customer’s Car Is Damaged in Your Care?
If you damage a customer’s vehicle while servicing, storing or moving it, your motor trade insurance should respond. But understanding how these claims work and what insurers expect from you can be the difference between a smooth settlement and a rejected claim.
This guide covers what happens when a customer’s car is damaged in your possession, how to report it correctly, and what documentation you’ll need to support your claim.
What Does ‘Care, Custody and Control’ Mean?
Most motor trade policies include cover for vehicles in your care, custody and control. This applies when you’ve taken responsibility for a customer’s vehicle during the course of business.
It covers situations including:
- Servicing or repairing a vehicle in your workshop
- Storing cars on your forecourt or premises overnight
- Valeting, inspecting or detailing customer vehicles
- Moving cars around your site
- Test driving with the owner’s permission
If the vehicle is damaged, stolen or vandalised while under your control, this cover should apply. The extent of protection depends on your specific policy wording and whether any exclusions apply.
Common Scenarios That Lead to Claims
Damage can happen in several ways, even with experienced staff and good systems in place. Typical claims include:
- A vehicle falling from a ramp or lift during repair work
- Accidental collision while manoeuvring on site
- Fire damage in the workshop
- Theft from the forecourt or car park
- Vandalism or malicious damage overnight
- Accidental damage during valeting or cleaning
Each of these may be covered, provided you’ve met the policy conditions and the incident wasn’t caused by negligence or breach of terms.
What You’ll Need to Report a Claim
When damage occurs, insurers expect prompt notification and supporting evidence. The faster you act, the smoother the process.
You should prepare:
- Proof the vehicle was in your possession (job card, booking sheet, signed handover)
- A written account of what happened and when
- Photographs of the damage
- CCTV footage, if available and relevant
- Details of any witnesses or staff involved
- The customer’s contact details and vehicle registration
If the incident involves theft or vandalism, you’ll also need a crime reference number from the police. Some insurers may ask about your security measures, especially if the damage occurred outside working hours.
What About Test Drives and Road Use?
If the damage happens while driving the vehicle on public roads, the road risk element of your policy applies instead of the care, custody and control cover.
This depends on several factors:
- Whether the driver is named on the policy or covered under ‘any driver’ terms
- The level of cover (third party only, third party fire and theft, or comprehensive)
- Whether the journey was for a legitimate business purpose
Not all policies allow unnamed staff to drive customer vehicles, even for short trips around the block. If you regularly allow employees to test drive or move cars, check they’re properly covered. You can read more about this in our article on test drive cover.
What Can Void or Delay a Claim
Claims can be rejected or disputed if you haven’t followed the terms of your policy. Common reasons include:
- The vehicle was left unlocked or unattended in breach of security requirements
- It was moved or driven without the customer’s written or verbal permission
- The driver wasn’t authorised under the policy terms
- You failed to report the incident within the required timeframe (often 24 to 48 hours)
- You didn’t keep adequate records of vehicle handover or condition
To avoid complications, make sure your intake process is documented. A simple signed form confirming the vehicle’s condition and mileage on arrival can protect you if a dispute arises.
How Claims Are Settled
Once the insurer accepts the claim, they’ll either:
- Arrange repairs through an approved repairer
- Settle the claim based on an independent engineer’s assessment
- Offer a cash settlement if the vehicle is written off
You’ll usually need to pay the policy excess. If the customer is unhappy with the repair or settlement, the insurer will handle any disputes, but it’s still worth keeping communication open and professional.
Protecting Yourself and Your Business
Prevention is always better than a claim. Simple steps can reduce your risk:
- Use a clear vehicle handover form with condition notes and signatures
- Keep keys secure and restrict access to authorised staff only
- Install CCTV covering your workshop and storage areas
- Store vehicles in a locked compound or garage overnight if possible
- Train staff on safe handling and movement procedures
- Review your policy annually to ensure it still matches your business activities
If you operate in a specialist area such as valeting, you may need additional cover. Our guide on what insurance car valeters need explains this in more detail.
Get the Right Motor Trade Insurance
Having the correct level of care, custody and control cover is essential if you handle customer vehicles. Whether you’re running a garage, valeting business, or part-time motor trade operation, your policy should reflect the reality of your work.
If you’re unsure whether your current insurance covers you properly, or you need to make a change, get a tailored quote today using the button on screen.
