'Dude, Where's my car -- and are you Insured?'

When you pull up to a restaurant, toss the valet your keys and wander off to enjoy your evening, you probably never give another thought to the misfortunes that could befall your vehicle while it's in the custody of uniformed strangers.

But rest assured that most parking and valet companies are keenly aware of the potential lawsuit-worthy risks of their trade, including physical damage due to valet negligence, personal injury from an accident involving a customer or valet, and vandalism or even theft of a vehicle.

Any operator who hopes to be in business for longer than a weekend wedding carries valet parking insurance or a parking operator's policy designed by insurers that specialize in this custom coverage.

"The majority of parking operators follow the rules," says Kathy Phillips, senior vice president of Alliant Insurance Services, based in Newport Beach, Calif. "The exceptions that try to fly below the radar create a bad name for a good industry."

'Lots' of liability? Here's what's covered

Valet/parking insurance coverage typically includes:

General liability: It covers personal injury caused by a valet (such as when a pedestrian is accidently struck) or parking lot conditions (as in slip-and-fall claims).
Garage keepers' legal liability: It protects against property damage and loss resulting from collisions or vehicle thefts that occur in the insured lot or garage, even if the insured valet company doesn't own the property.
Workers' compensation: It reflects that parking hundreds of vehicles a week and dashing through parking lots can take a toll on valets.

Parking/valet policies are often tailored to fit specific business types, such as self-park lots, shuttle services, special events and on-street (off-premises) parking.

The National Parking Association, an industry trade group based in Washington, D.C., says on its "Insurance coverage checklist for parking companies" that it's typical for operators to carry a minimum of more than $5 million of general liability and $1 million in garage keepers' legal liability coverage.

Insurance is tapped only for the big stuff

To keep premiums in check, many parking/valet operators opt to include a self-insured retention, or SIR, agreement that acts like a per-claim deductible. Operators pay small claims outright and tend to notify the insurer only when a potential claim starts to approach their self-insured limit.

"We have a very high deductible -- $10,000 -- so the door bumps and minor fender benders are always below that, and we deal with those internally," says Brian Haupricht, founder and owner of Park Inc., a parking management services firm based in Charlotte, N.C. "Most of our claims are probably $2,000 to $3,000."

Haupricht says having the leeway to settle small claims in-house is vital to his customer service.

"If a claim is due to our negligence, it's covered through us," he says. "We've heard of companies that cut corners or have a standard policy to deny claims first go-round and handle what comes back. That's not the route we take. We try to do things on the up and up."

6 things you may not know about valet parking

The three most expensive cities for valet parking are New York, Honolulu and San Francisco.
While male customers tip better than female customers, female valets make better tips.
Most drivers will tip better when the weather is bad.
Valets dislike rain more than cold.
The concept of valet parking is credited to Herb Citron, who donned a red jacket and bow tie back in 1946 to charm customers at Lawry's Prime Rib restaurant in Los Angeles.
Most drivers get aggravated after waiting nine minutes to retrieve their car, but nearly half of drivers ages 18 to 34 become peeved after as little as one minute.

Source: Park Inc.

'But my parking stub says ...'

Even well-insured parking and valet companies don't typically insure against every conceivable risk, so sometimes you're left to turn to your own insurance. That's where that parking stub you receive with the legal disclaimers on the back comes into play.

"They are the 'first alert' to the patron of risks they may be taking by using the service," says Connie Fox, vice president of ArmorPark, the parking/valet insurance division of Dallas-based U.S. Risk. "Using a parking service is usually a privilege, not a requirement. Even self-parking garages cannot guarantee 100% safety and security of cars."

Parking-related claims that may fall to your auto insurance or home insurance include:

Vandalism and theft: If your vehicle is damaged or stolen by a third party after being valet-parked, the parking/valet operator is usually held harmless as long as they locked the car, secured the keys and took "due care" to protect your ride.
Acts of nature: Operators are not responsible for damage from weather-related events such as hail, lightning, falling objects and flooding, unless the valet was somehow negligent. "An example would be if the valet promised covered parking for vehicles and instead parked them outside the garage when severe weather was evident," says Fox.
Theft of vehicle contents: That parking stub usually states that the parking/valet operator is not responsible for personal items left in the vehicle -- and for good reason. "It's easy to claim that something of value was stolen, but in the absence of proof that the item was in the vehicle when the valet took possession of it, it's simply the word of the patron against the word of the valet," says Fox.
Collision disputes: "A customer's insurance is most commonly involved anytime there is a dispute over who is the negligent party in a collision," Fox says.

Be a nosy parker

Few parking/valet operators -- and even fewer hotels and restaurants -- want to rattle customers by raising the issues of parking insurance and risk, say by displaying a "fully insured" sign at the porte-cochere. So Haupricht says it falls to consumers to use their heads before they hand over the keys. That means be alert, and ask questions.

"If the valets look sketchy and you don't feel totally comfortable, it's OK to go and ask what your options are to self-park," he says. "There is no such thing as a mandatory valet service. There are places that will say, 'If you want your car parked in our lot, then it has to be valet,' but you always have options if you're not comfortable using them."