Auto Body Shop Insurance

Factors that affect the cost of auto body shop insurance

Insurance premiums can vary a lot between auto body shops. From the number of vehicles you repair each week to the type of services you offer, your shop’s location, and the value of your equipment, insurance companies look at many factors when setting your rates. Here are some of the biggest factors they consider:

Business location

Shops in urban areas with higher theft, vandalism, or severe weather risks often see higher premiums. This means that a Toronto shop would likely pay more in premiums than a small‑town shop due to higher vehicle theft rates.

Number of employees

More staff means more exposure to workplace injuries and potential liability claims. For example, a 15‑person repair team will generally have higher premiums than a three‑person auto repair business.

Annual revenue

The more revenue you bring in, the higher your potential liability exposure, which means higher premiums to compensate. So, for example, a high‑volume collision centre processing dozens of repairs every week would likely pay more than a small specialty shop.

Shop size and property value

Larger auto body repair shops with higher‑value buildings, equipment, and inventory typically need more coverage, and that can increase premiums. For instance, a multi‑bay facility with two paint booths will likely have higher property replacement costs than a single‑stall shop.

Type of services offered

Paint booths, welding, frame‑straightening, and mobile repair units can all increase your risk profile due to fire hazards, equipment costs, or on‑site liability. So, a shop offering on‑location repairs with a mobile spray booth may have higher coverage needs than a shop focused only on minor in‑house repairs.

Claims history

A clean claims record can help lower your premiums, whereas making frequent or costly insurance claims will generally raise your rates.