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Garage Sale Savvy : Smart Sellers Check Liability Insurance, Local Laws Before Holding Yard Sales

TIMES STAFF WRITER

Spring cleaning got you thinking about putting on a garage sale? Before you set up shop, better check with your insurance agent to ensure you have adequate liability insurance in case a visitor is injured while browsing through your sale items.

“The individual consumer is usually covered with liability--most insurance policies have some liability coverage, and homeowner policies have it as an automatic matter, of course,” said David Crocker, area manager of the Western Insurance Information Service, a nonprofit consumer education group that serves 10 western states. “But in such a sue-happy society, they’d be well-advised to make sure of their coverage.”

An average homeowner policy includes liability coverage of $100,000, Crocker said. But “for some people, $1 million isn’t enough.”

Consumers who are “just getting rid of stuff from spring cleaning, chances are they won’t have to buy extra coverage,” Crocker said. “But if it’s a regular thing--a lot of people have a garage sale every Saturday--then the insurer might consider it a commercial venture. If you have strangers coming on your property every weekend, you just have a higher risk that someone will slip and fall or cut themselves.”

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If you live in the city of Los Angeles, holding garage or yard sales too frequently also can run you afoul of local government.

The Los Angeles municipal code, for example, says an individual can conduct only three garage sales a year at the same site--more often than that and you’re violating the code. But policing garage sales is difficult, a spokeswoman at the city clerk’s office admitted.

If consumers conduct sales too frequently and are “going to make a business of it, then they have to have a commercial permit,” said Lisa Adea of the City Clerk’s tax and permit division. That means you have to have a retail sale license, which costs $100.78 a year and is renewable annually on Feb. 28.

No license for garage sales is required by Los Angeles County, whether you have one a year or 365 of them, a spokeswoman for the county’s licensing section said. But it might be wise to check with your city’s clerk or police to see if city permits are required.

As for insurers, if presented with just one injury at an infrequent yard or garage sale, “I think an insurance company would probably go ahead and pay one claim, but if they found out you’re doing it every week, that would be running a business and they’d insist on a commercial package policy,” said Dave Bentley, a Torrance insurance agent. “Commercial insurance for liability can get quite expensive--$1,000 to $1,500.”

If you’re planning to rent space to sell items at a swap meet or flea market, your homeowner liability coverage will not apply. You’ll need separate coverage, either purchased through the organizers of the meet or your own insurer.

“Swap meet coverage would be about $1,500,” Bentley estimated, but added: “The people who run the swap meet usually cover the individual vendor.”

If you and your neighbors get together once a year for a combined sale, you probably will be covered under your or their homeowner policies, Crocker said. Or, if you’re running a sale to benefit a charity, say a church, then any accidents are “likely to be covered under its own insurance policy,” said Crocker.

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Now that you’ve gotten the insurance questions settled, you should follow basic garage sale tips from experts:

Set the date and give yourself at least three weeks to prepare. Avoid holiday weekends.

Limit your sale to two days. Most items will sell on Saturday. If you really want to get rid of the stuff, lower prices to rock bottom on things left by mid-afternoon Sunday.

Depending on your budget, advertise in your local paper or the free neighborhood circulars. Newspaper ads mainly will attract garage sale regulars. The most effective way to get the word out for drive-by customers is to put up big, easy-to-read signs around the neighborhood a few days before the sale.

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Dorothy Mahakian and Thelma Jackson of Hollywood, who held a successful dual sale last weekend, stressed the importance of having good street signs with directions to your house.

“We did very well, and I think it was a combination of good signing--people said our signs were quite complete--and the right prices,” Mahakian said. “People come to garage sales looking for bargains.”

Bargains or not, you should try to price sale items realistically. Be sure, too, that you know what you’re selling; a Depression-era glass vase, for example, may not be your cup of tea, but it surely will be worth more than a few dollars. Check prices at antique shops if you have a question about an item’s worth.

Schedule your sale as early as possible.

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If you want to try a civilized hour such as 9 a.m., be prepared for the first customers to arrive a lot earlier: Most garage-sale junkies believe the “early bird gets the worm” and may arrive at your door at 7 a.m.

If you advertise your sale in the paper, Mahakian advised, expect antique dealers to show up the day before to try to snap up bargains.

Organize items in groups and set up tables to display them on. People seem to feel items on the ground are cheaper. Spruce up sale items by washing or dusting them. If you have clothing, hang it rather than boxing it.

To dispose of items you really don’t want to haggle about, put them in a box marked “Everything here is $1.”

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Make sure you have plenty of $1, $5 and $10 bills, as well as coins, to make change.

To make it easier for appliance buyers, have an outlet available so they can make sure electric appliances work.

As soon as the sale is over, take down your street ads.

Your neighbor may need the space next weekend.

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