Property & Equipment Insurance for Auto Repair Shops

By the Repair Shop Insurance editorial team · Updated September 27, 2026

What a repair shop’s property coverage includes

Building

If you own the building, property coverage can pay to repair or rebuild it after a covered loss such as a fire. If you lease, your lease may still make you responsible for insuring parts of the building or the improvements you’ve made — bays, lift installations, compressed air lines, or office build-outs.

Business personal property

This is everything the business owns inside the building: lifts, alignment racks, tire machines, diagnostic scanners, air compressors, hand and power tools, computers, office furniture, and your parts and fluids inventory. For most shops it adds up to more than owners expect, so it’s worth a walk-through with a notepad before you choose a limit.

Business income and extra expense

A fire that closes your shop for three months costs more than the repairs. Business income coverage can help replace lost net income and pay continuing expenses like payroll and rent while you rebuild. Extra expense coverage helps with costs to keep operating, such as renting temporary space.

Tools and equipment that leave the shop: inland marine

Commercial property policies are generally written for property at your insured location. Equipment that travels — a portable diagnostic unit, a service truck’s toolset, or tools taken to a customer’s location — is often insured under an inland marine coverage form, sometimes called a tools and equipment floater, which follows the property wherever it goes. Our guide to tools and equipment insurance explains how that coverage works, and if you do any mobile work, see mobile mechanic insurance.

Other coverages worth asking about

• Equipment breakdown. Covers mechanical or electrical breakdown of equipment such as air compressors, lifts, and electrical panels, which standard property forms often exclude.
• Crime. Employee theft, and theft of money, are typically limited or excluded under property coverage and are written separately.
• Flood and earthquake. Generally excluded from standard commercial property policies and available separately where offered.

How property is valued

Replacement cost pays to replace damaged property with new property of like kind and quality. Actual cash value deducts depreciation, which can leave a significant gap on older equipment. Many property policies also include a coinsurance condition: if your limit is too low relative to the value of what you insure, a claim payment can be reduced even for a partial loss. Setting limits based on realistic replacement values avoids both problems.

What property insurance doesn’t cover

• Customers’ vehicles — see garagekeepers insurance.
• Vehicles your business owns — see commercial auto.
• Injuries or damage to other people — see garage liability.
• Wear and tear, gradual deterioration, and other excluded causes listed in the policy.

What affects the price of property coverage

Building construction and age, fire protection (sprinklers, alarms, distance to a fire station), security, how flammable materials are stored, your location, the values you insure, and your deductible all factor in. Housekeeping matters in a shop: storage of solvents, waste oil, and oily rags is something insurance companies look at.