In my experience, not many shops offer coverage for customers' vehicles (autos, ATV's, etc.) and most have a sign stating that. Know of anyone with their vehicle being vandalized while at the shop's lot? Obviously if the shop is legally liable for damages then they'd be responsible (falling off the lift, accident while test driving, damaged by technician, etc.). And fire? Well, was the shop negligent? I've been told it's very difficult to subrogate a fire loss under fire-legal liability, but;
I would certainly consider filing a claim under her Homeowners Insurance policy, IF there's coverage for the ATV. If there is, and if in-fact the shop is legally liable, the insurance company will subrogate against them which would include a return of your sister's deductible. The claim should also be coded as being fully subrogated (or not-at-fault) so as to not count against her, but that's kinda iffy as the insurers want to count just about everything against you that they can
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I would speak directly with a claims adjuster about whether the ATV is covered under her Homeowners policy and if they feel they could subrogate. I wouldn't just take the agent's word for it. If they pay her claim, they will subrogate if they feel they have a chance for recovery. If they don't, she probably wouldn't either. Let them foot the legal costs!
Sis gets a letter from the insurance company stating they only have 125K of insurance for the whole ball of wax and won't be compensated for their loss. Too bad, so sad, and don't let the door hit you in the ass on the way out!
I would be curious under what coverage the $125k applies. Fire legal liability? Property Damage liability? Customer's Bailee coverage? IF there's coverage but not enough, I would think it would be prorated amongst the claimants.
Regarding coverage under a Homeowners policy here in NE (with State Farm) it may offer coverage for liability and "Named Perils" under the Personal Property coverage IF the ATV is used SOLELY to service the residence premises. And this could truly be up for interpretation as anything outside of that, the ATV could be considered a recreational vehicle. And if the ATV EVER leaves the residence premises it is then considered a recreational vehicle. Technically this could include a gravel road to get to a different section or part of your property.
Most farm insurance policies cover ATV's if instructed. Ask your own agent if you have coverage. That may save the day.
Most Home and Farm policies now specifically mention ATV's due to their recreational nature as well as service uses. So even though your agent may say "yes" when asked if my ATV is covered under my policy, if you mention to the claims adjuster that you occasionally take it trail riding or your son or daughter rides on his or her friends' poperty, it's now a Recreational Vehicle and may have limited or no coverage under your home or farm policy! And what if it's a friend or relative injured on it and you then find out there's no coverage? Can you financially afford a bodily injury lawsuit?
For those of us with any type of ATV, UTV, UTX, etc, find out now what your policy covers (Homeowners, Farmowners or RV policy) and most importantly, in what cases would there be NO coverage? Get this directly from your policy or Claims Rep, not just from the agent unless you can get it from him/her in writing (which would be a major faux pas on their part!).
I have 2 ATV's and a UTV on the farm here, all used to service the residence premises (from my perspective) and never leave the premises. The UTV is the only one I have a separate policy on due to it's value and allowing others to ride it, because I want nothing left to chance if there's a loss, carries a much lower deductible and if there's a loss it doesn't go against my homeowners policy! The other two SHOULD be covered under my Homeowners policy but if they're not, it's not a big loss.
Just my $.02
