Wednesday, 14 June 2017 GMT
Author: Staveley Head
In a highly competitive motor trade industry, making sure you get the right insurance cover at the best price is important. Whether you’re new to the motor trade or experienced, we understand that every business is different.
As motor trade insurance specialists we hear many assumptions during quote calls about what you can and cannot be insured for. So with that in mind, we’d like to share with you the motor trade myths we hear to help you avoid any potential pitfalls when you’re looking for a motor trade insurance quote.
‘By leaving some drivers off my motor trade quote this’ll make it cheaper’
In some cases this might be true, but this isn’t recommended. If you’ve an employee that needs to drive one of your vehicles and they’re caught without cover this could lead to trouble with the law. Even worse still, should they be involved in an incident, you won’t be able to make a claim for any damage to your / your customer's vehicle whilst a third party might make a claim against your business/policy.
Remember you’re required to have employer’s liability insurance by law if you employ anyone to work for you, this can include people who are paid and unpaid. This’ll protect your business against potential claims that may arise from an employee injury or illness.
‘I’ll get a cheaper insurance quote as a part-time motor trader’
If you’re a part-time motor trader this won’t necessarily make your quote price cheaper than if you worked full time. Should you have another occupation, make sure you declare this at the quote stage and you might be able to get covered for business use.
‘I’m assuming that a cheaper insurance quote is better’
Leaving out key information e.g. not declaring your vehicles correct overnight location and not personalising your quote could affect the quoted price. But you’re running the risk that your quote might not be based on the right cover that you’d need.
Let’s consider public liability insurance. Which provides useful additional cover in the event of any legal action or compensation claims made against your business by a third party. It isn’t a legal requirement but it’s better to be safe than sorry.
‘I can get a quote for trading from my home address’
It’s possible to get a quote for trading from your home address. But if you’re also trading from a busy town or city, you could find that your insurance quotes are higher due to trading in a higher-risk area. It’s important that you state both addresses so that you can get the right cover.
‘I assume my motor trade quote will include cover to drive any vehicle’
You can be covered for any vehicle that is owned by you or registered to you or in your care, custody or control for the purposes of your motor trade business.
‘There isn’t a need to add a vehicle to my quote that is hardly used’
If you have a vehicle that isn’t used for 99% of the time, it might be tempting to leave it off your motor trade quote. However, the vehicle will not be covered under the policy. For example, if you’re caught by an automatic number plate recognition (ANPR) and the vehicle isn’t on the motor insurance database (MID). You can be fined up to £5,000 and have the vehicle seized. Furthermore, should the vehicle be involved in an incident your vehicle wouldn’t be insured for loss or damage.
Don’t forget that whenever you sell a vehicle, you must remove it from the MID immediately. This’ll protect you in the event of the new owner being involved in an incident after leaving your trading premises. If you fail to remove the vehicle from the MID, you as the policyholder will be liable for third party damages, therefore losing any no claims bonus you have earned.
‘I can’t transfer my personal No Claims Discount (NCD) to my motor trade quote’
You can use your private NCD against a new policy. However, it isn’t transferred but may be used to obtain an introductory discount.