What is Motor Trade Insurance?
Motor Trade Insurance or Traders Insurance is policy specially designed to protect those who work on or buy and sell vehicles for a living. It is also quite common to refer to this type of policy as just ‘Trade Car Insurance’.
Car mechanics, full and part time car sales, valeters, body shop repair garage and MOT stations are all types of trader who will require this type of policy.
Types of Policy
Policies for the car trade industry are broken downinto two main sections and as a trader, you will fall under one or the other.
Road Risk Insurance
A Road Risk policy is what most individuals will require. This form of motor trade policy will typically include cover for the vehicles you are working on or vehicles you hold in stock to sell against things such as damage or vandalism, fire and theft.
Those wanting a road risk only policy quite oftentrade from home or on the road and will not have a separate premises.
A road risk policy insured for Fire & Theft onlyis the most basic form of traders policy allowed to operate legally.
You will need a combined motor trade insurance policy if you work or trade from a premises separate to your home. This is to ensure you have premises cover as well as cover for the vehicles.
This type of policy will provide protection not onlyfor the vehicles but a premises and the vehicles at the premises (either yoursor a customer’s).
If an incident were to arise at your separateproperty, whether it be an accident, damage to a vehicle or a theft, it islikely your combined policy will cover it.
Both road risk and combined policies can be tailoredby motor trade brokers to include other aspects like demonstration cover andemployer’s liability cover.
Cover levels of a Traders Insurance Policy
Traders insurance is extremely flexible and can betailored to each motor trade business needs. Much like private car insurance,it is broken down into 3 cover levels.
A third party policy is the minimum level of coverrequired to trade. This cover level will cover the vehicles or those who aredamaged or involved in a accident of your causing. It does not cover anythingof yours though.
Third Party Fire & Theft
This form of cover will cover the above but also anyvehicles that are set fire to or stolen whilst under your control. This caninclude your own vehicles as well.
This cover is the most sensible level of cover to go foras this will cover you as well. It will include all of the above but also fullyprotect and cover yourself and own vehicles in the event of a fault claim.
Comprehensive insurance can be tailored to include coverfor tools as well as many other items you may choose to list.
As part of the tailoring process of your trade care insurance, you maywish to add the following additions.
- Legal Expenses – Legal expenses allow you to be able to fight a claim in court without it affecting your own wallet.
- Breakdown Cover – Just as the name suggests, breakdown cover provides cover if your vehicle breaks down at all and provides rescue and recovery services
- Public Liability Insurance – Public Liability Insurance makes sure that you are covered for costs regarding any legal action that may arise if a third party gets injured or damages occur to their property either at the business premises or if you are working at their home
- Employer’s Liability Insurance – It is not just the public claims that you have to anticipate; sometimes claims may come from your own employees. Employer Liability Insurance covers this scenario by covering expenses arising in employee claims.
Working out the right level of cover for you
Whenbuying a trader’s insurance policy, you need to make sure you know all the needsand requirements of your business regardless of how big or small or full orpart time. Knowing this information will help you determine the kind of policy whichis right for you.
Somepolices can include benefits such as allowing employees to use vehicles forpersonal use, this is likely to cost extra however and if you don’t haveemployees, then it is an unrequired extra.
Wesuggest you list everything that you intend to do within your business and thenhave that ready when you speak with an underwriter.
Keeping the cost of car trade insurance down
We all want to try and keep the cost of our motor trade insurance quote down, so here are some things you can try to help reduce your costs.
- Pay annually – Though annual payments may appear less appealing than monthly ones, you can save quite a bit more on your policy than you otherwise would. A great tip here would be to always put a little bit of money aside throughout the year; that way, when your renewal comes you are able to pay the lump sum off and save yourself a pretty penny in the meantime.
- Shop around – Now, this one seems obvious, but it’s surprising how many people are content on renewing with their current policy provider. Make sure you always shop around when looking for renewal prices, you could end up saving yourself hundreds of pounds whilst maintaining the same level of cover.
- Security – Heightening your premises security will more than likely result in a drop in renewal price, as insurers will be more confident that your vehicles are secure and have a smaller possibility of being stolen or vandalised.
Frequently Asked Questions
It’s quite common to have a few questions when buying a policy, here are a few of the most commonly asked questions.
If you operate a business within the motoring industry for profit, then yes, you will require a motor trade policy. People often think that only those who buy and sell cars require insurance. This is not the case and it is a legal requirement that everyone involved within the industry be covered with a minimum level of Third Party Insurance.
A motor traders insurance policy is not only beneficial to the owners of the business, but to the employees at the same time. It can prevent individuals from loosing money or assets in the event of an accident.
One of the main risks involved in not having adequate cover is the financial damage it can cause. Some traders may think it would be cheaper to not invest in trade car insurance and to pay for any claims themselves should one arise. Although this sounds like an easy option, it is the most financially damaging route to take.
It may seem like a cheaper option to take due to not having monthly payments to your insurance provider but in the event of a claim, you can never be fully prepared for how much you may have to pay out.
Our Motor Trade brokers measure the risk of claims and how much these claims could cost. If you simply think you can pay for these claims yourself, you could find that claims cost far more than you would have anticipated. This can lead to you risking the financial standing of your motor trade business.
Another main cause for concern if you do not take out adequate motor traders insurance is that the effects of not being fully covered can severely affect your business and customer relationships.
Customers are more likely to sell their car, buy a car, or have their car fixed by a motor trader who has valid and full motor trade policy. This is because the customer will feel comforted to know they are protected from all claim situations. Not being a fully insured motor trader could mean you risk losing customers or can’t even attract customers to your business causing a drop in financial stability.
Therefore it is best to always have effective motor trade policy, it simply isn’t worth the risk of going without it. Investment into motor trade insurance cover today ensures you will continue to attract customers over time by following the correct guidelines in the event of claim.
Buying a policy is not always as easy as it seems. Assuming you are an actual motor trader, you must first determine what kind of policy is right for your business (our advisors can help with this). You can see from the insurance quotes the differences in their features, coverage, as well as premiums.
Cheap traders insurance unfortunately is not always a given regardless of who you apply with. The price of your premium depends entirely on your risk profile such as how well you have maintained your no claims bonus, your trading location and more. However, even with a less than perfect risk profile, we can help find you a competitive policy still.Speak with one of our advisors and they will be more than happy to assist you with your query.
Below is a list of trade activities that fall within the motor trade industry.
- Vehicle sales – part time and full time
- Roadside Recovery
- Accessory fitters
- Auction Houses
- Mobile Mechanics
- Vehicle restoration
- Body Shops
- MOT and Vehicle servicing
- Car Jockey’s
- Exhaust and Tyre fitting
- And many more
We work with a large board of specialist brokers who enable you to quickly provide you with a trade insurance quote to compare. Our UK leading traders insurance brokers use expert insurers such as Tradex. All our advisors are knowledgeable with a wealth of experience working on finding you competitive traders cover.
Our services are free to use and there is no obligation to take out the premium. Simply enter your details and get comparing!