Motor Trade Insurance FAQ
Can I apply for Motor Trade insurance?
To qualify for Motor Trade insurance you have to fit the following criteria:
- You will need to have held a licence (mainly UK) for 12 months or more.
- You will have to have been resident in the UK for 3 years.
- Excessive motoring convictions or claims may restrict your access to a policy as will criminal convictions.
- Some companies will require that you have a minimum of 1 years no claims bonus.
- A lot of companies will cover people who work on a full-time or part-time basis within the trade so you don’t have to be a large business.
The requirements may differ between insurance company so please ensure you check when getting a quote, that you fit all the relevant criteria for a motor trade insurance policy.
Is there an age limit on this type of insurance?
Most motor trade policies will require that you are over 25 years old, although there are some policies on the market that will cover drivers under 25 – though the general rule is that you will have to pay more, the younger you are. If you secure insurance under 25 you may find that you have a lower level of cover, or have certain policy restrictions in place, including larger excesses or engine size / vehicle performance restrictions.
Will all my vehicles be covered under one policy?
This is a tricky question and depends entirely on the specifics of your individual policy. Some motor trade insurance policies may only cover cars, whereas others may also cover vans, trucks or even agricultural vehicles. If you are unsure, you should definitely speak to your broker about what can and can’t be covered. Some companies may exclude certain vehicles, increase your premium or add specific terms if you want to cover Modified Vehicles, Imported Vehicles, Sports Vehicles, Classic Cars or Motorbikes/Quads.
Can I add my spouse/partner onto the policy?
Most Motor Trade insurance brokers will allow you to add your partner or spouse to the policy. Certain insurers may also allow you to specifically exclude them from business use. In doing this, you may also decrease your premium.
If my spouse was on the policy could they take the children to school?
Yes, but only if the policy you’ve taken out includes Social, Domestic and Pleasure use. This will allow any named driver on your insurance to use the car for domestic reasons, including shopping, commuting, family outings etc.
What driving restrictions are there under a motor trade insurance policy?
There are typically 2 types of vehicle use you can have on your policy, each with their own restrictions:
- Motor trade use only – vehicles can only be driven for the purpose of business and cannot be driven for any other purpose;
- Additional business use – vehicles can be driven for other business use as well as the motor trade.
Do I need to notify you of any change to my business?
Yes, we need to be made aware of any changes that are made to your business that could affect your insurance, as soon as possible, to prevent any potential issues with cover.
Do I need to operate my motor trade business from a premises?
No. We can cover people working from home or from a different trading address.
Who is entitled to drive on my motor trade insurance policy?
Some of the more expensive and comprehensive, motor trade insurance policies allow any driver to operate the vehicles on cover (subject to conditions), but most will require that you name the specific drivers you want to have access. You will therefore be charged per person and per risk of that person. If you think about it, you are massively increasing the cover as each driver means another person can be driving at the same time, and therefore you will likely pay more for your policy. A spouse can generally be added cheaply, however.
Can I drive someone else’s car with their permission?
Yes, providing that the vehicle is in the custody of the policy holder and that it is for motor trade purposes only, you can drive someone else’s car, for example a mechanic, bodyshop, valeter etc.
Will it cost more to add another driver to my policy?
Yes, adding another driver to your policy, you essentially increase the risk of having an accident, and therefore will need to pay a higher premium. With a motor trade insurance policy, all named drivers could theoretically be on the road at the same time, and therefore pose a higher risk to the insurer.
Do I need to notify you of any vehicles that I get?
You must notify us of any vehicle in your custody or control which are taxed and on the public highway. Depending on the insurer, you have between 24 hours and 14 days to do so. You will also need to update the Motor Insurance Database – for details of how to do this please contact your broker.
What vehicle value will I be paid if the vehicle is a write off?
If you have a “motor trade insurance” policy you would only be paid the trade value of a vehicle minus the policy excess for your own vehicles.
Are the vehicles covered at my business or at my home address?
If you work from home, and providing your insurer offers stock of vehicles cover, then your home address will be taken as the business premises. However, if you have a dedicated premises for business then this would require an extra premium for cover.
Would my employees be covered for private use in their own vehicles?
How quickly could I get cover for a new vehicle?
Any new vehicle would be covered immediately providing that it fits within the parameters of your current policy.
Can I change my policy cover during the period of insurance?
Yes. However, any changes made will affect your premium.
Will the cover extend to my other non-motor trade business?
Your motor trade insurance policy can also be used to provide cover for certain additional occupations, for example builders, plumbers, providing you have additional business use cover on your policy.
Can I get cover for vehicles at my trade premises?
Some motor trade insurers offer stock of vehicles cover at your premises and charge accordingly, but check with your provider.
Can you cover part-time motor traders?
Yes. Providing that it is an actual business and not a past-time then we can provide you with part-time motor trade insurance cover.
Do you cover recovery vehicles?
Yes we can cover recovery vehicles, however some companies will charge you more or apply additional terms to your policy. You will also have to disclose what it is used for – i.e is it just for collecting your own vehicles or do you run a recovery or delivery service (again these occupations may incur a load).
Will I have windscreen cover under my policy?
Comprehensive and third party, fire & theft windscreen claims would be covered under the 'Own Damage' section of your policy. If you have third party only cover, then there is no windscreen cover. Any claim made would fall under your policy excess and will affect your no claims bonus.
Can I use a No Claims Bonus from my car or van insurance policy for Motor Trade insurance?
This depends on the insurance company or broker you are using. We can use both private and commercial bonus (as well as motor trade bonus, of course). In some cases we can even mirror your no claims bonus if it is being used already – please ask for details.
Do you offer motor trade insurance to Northern Ireland?
Unfortunately we do not.
What is the maximum no claims bonus I could earn on my motor trade policy?
The maximum varies depending on insurer; some only offer 4 years, but most allow a maximum of 5 years no claims bonus.
Could I receive a discount with a company letter stating that I have had claims free driving?
A discount can be obtained on a motor trade insurance policy, providing your current/previous employer confirms, on their letter headed paper the dates in which you were driving, along with their insurer's name and their policy number.
If I make a claim, will I lose all of my motor trade no claims discount?
Depending on which insurer you are with, plus the size and circumstances surrounding the claim, most insurers will step back your no claims bonus from 5 years to 2 or 3 years. Some insurers may take it back to zero after just 1 claim, and almost all insurers will take it back to zero if 2 claims are made within 3 years.
Could I protect my no claims bonus like I can with a private car?
Yes, your no claims bonus could be protected on your motor trade insurance policy just like a private car policy. However, if a claim is made, the next motor trade insurer may not accept the protection and could take back your no claims bonus. To get the maximum benefit of protecting your no claims bonus, the key is to remain with your current insurer - but this is not always the cheapest option.
Can I add Protected No Claims during my current policy?
No, if you require Protected No Claims then this has to be included when you originally take out your policy, or at renewal, but not mid-term.
Can I pay over instalments?
Not all brokers will give you the luxury of paying by instalments on trade policies, but we can. We are able to offer flexible plans that can spread your payments over the year - please ask us for more details.
What is Demonstration Cover?
Demonstration cover (generally for an additional premium) allows you to let a prospective client to test drive your vehicle, thus allowing you to increase your chance of a sale. The cover generally requires that you accompany the driver and supervise the test drive. Some larger policies may be able to arrange unsupervised test drives or that the vehicle is lent to the client for a weekend.
What is a Combined Motor Trade policy?
A combined traders policy covers more than just the standard road risks. It can cover the following (and more!):
- The premises building itself.
- Liabilities including Public & Employers.
- Stock of vehicles.
- General stock stored at the premises.
- Money kept on site.
- Business Interruption.
- Portable Tools.
- Machinery, Plant & all other contents.
A combined policy will generally need a lot higher level of security due to the amount of extra cover supplied – this can be in the form of walls, security gates/doors and alarms.
What is the difference between comprehensive and third party only cover?
In the event of an accident, a comprehensive policy will cover any third party involved, damage from fire and theft of the vehicle, plus any damage to the vehicle whilst in your care or control. A third party only policy will cover the third party claims only, meaning you will have to cover your own repair costs.
What is the Motor Insurers’ Database?
The Motor Insurers' Database was set up to help reduce the number of uninsured drivers on the road, which in turn would reduce the cost to the motoring industry for compensating victims of uninsured accidents. Each member of the EU had to establish a system to identify who insures a vehicle based on its registration number. As a motor trader, it is your responsibility to update the MID every time you buy or sell a vehicle – for details of how to do this, please get in touch.
What is Uninsured Loss Recovery service?
If you are involved in an accident that was not your fault then it may be possible for you to make a claim against the third party for any of your uninsured losses. For example the cost of vehicle recovery, loss of earnings, policy excess or a hire car.
What is the difference between a certificate of motor insurance and a cover note?
A cover note is a temporary certificate that we issue to you when your policy is taken out. It is lawfully the same as a certificate of motor insurance and is issued to you whilst we are waiting to receive your documents, i.e. your licence, no claims bonus and proof of trading if required.
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