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Everything you need to know about rising motor trade insurance premiums and fraud

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Rising insurance premiums is an issue for everyone, and in this guide, we offer useful information looking at why motor trade insurance premiums rise.


A common misconception is that claims are the only reason for increases in insurance premiums. In fact, there are several reasons your motor trade insurance premium may rise. One of the most recent rises was in Insurance Premium Tax (IPT) which saw a standard rate increase in June 2017, when it rose to from 10% to 12%.

Other rises may occur from fraudulent activity where insurers have had to pay large sums of money to compensate for false motor trade insurance applications, ghost broking and crash for cash scams. Fraudulent activity costs the UK insurance market more than £1 billion a year. One way of getting this money back is by raising insurance premiums.


A false motor trade policy application may be made to ensure vehicles appear on the Motor Insurance Database (MID) – which may then lead to lower premiums.

This is why when you take out motor trade insurance with Staveley Head we ask to see proof of trade.


Ghost broking is the name given to fraudsters selling false policies. These fake policies are not easy to spot as they’re designed to look real. There are a few things you can do to ensure your insurance policy is valid;

  • Check vehicle is registered on askMID.com;
  • Call the insurer named on the policy to check they have the correct details;
  • Use your common sense – if a quote is offered without the broker knowing your postcode or claims history it may be fraudulent;
  • Check out the Insurance Fraud Bureau’s (IFB) Insurance Fraud Register, a register of known fraudsters;

Crash for Cash

Crash for Cash scams are increasing the cost of motor insurance across the board from car insurance to motor trade insurance. This is when fraudsters purposely crash or make false claims for money. The IFB has created this list of crash for cash hot spots.

To report a fraudulent act you should contact CheatLine either over the phone 0800 422 0421 or online.

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