Motor Trade Insurance 101: What It Is For and Who Can Avail It

Do you know if you need motor trade insurance? Do you even know what a motor trade insurance is?

Responsible drivers and vehicle owners should be aware of different insurance packages available for them. To clarify everything that there is to know about motor trade insurance, we’ve prepared this pocket comprehensive guide to help readers understand what it is, its purpose, and its importance. Upon reading, you will become a more aware and responsible driver and citizen. You will also be easily able to answer if a person needs a motor trade insurance or not.

What is a Motor Trade Insurance Policy?

Motor trade insurance is different from private car insurance. It is a special kind of insurance that is dedicated and meticulously prepared for individuals who work in the car industry. People like mechanics, traders, car jockeys, valeters, and vehicle recovery agents should be covered by one as they work in the car industry.

Do You Need One?

If you are solely a private driver who uses a car for private or business use, you don’t need motor trade insurance. A regular car insurance policy will be sufficient for you.

But, if you sell cars or are in the car trade industry or you work with cars of customers in your place of work or business, then you definitely need motor trade insurance.

What is the purpose of a Motor Trade Insurance? Why will you need it?

Motor trade insurance is needed to protect individuals in the motor trade industry. Individuals that buy, sell, clean, or handle cars owned by customers need protection for themselves and for their customers in case unwanted issues take place.

Any individual can be covered by motor trade insurance as long as such person is working with vehicles in any way, form, or capacity. Car jockeys, mechanics, valeters, vehicle recovery agents, employees at body shops, mechanics, sellers, and even tyre fitters can and should be duly covered and protected by a motor trade insurance policy.

Available Levels of Cover

There are two levels of cover in motor trade insurance policies, road risk only, and combined cover.

Road Risk Only

Road Risk Only policies are for people with a home-based business or a small business. Individuals that fix cars or sell cars like mechanics or car sales agents with mobile shops or ones that operate on their own drive are also duly covered.

Combined Cover

A combined cover policy involves the protection of equipment, tools, machineries, money, buildings, and shop contents.

Additional Cover

With a motor trade insurance, individuals can also be protected from liability by opting for additional covers like Employer’s Liability, Public Liability, and Product Liability.

Kinds of Cover

Similar to standard car insurance policies, motor trade insurance offers different levels of protection to different parties.

Third-Party Only (TPO)

This is basic coverage that is similar to ones offered to private car owners. This covers third-party individuals should a motor trader be at fault in case of accidents. A Road Risk Third Party Only Policy is the minimum policy that motor traders are required to obtain by law.

Third-Party, Fire, and Theft (TPFT)

In this kind of policy, protection is offered should a vehicle be stolen or fire damage is incurred as a result of an accident. This policy becomes invalid if the policy owner is at fault for the theft.

Comprehensive

This policy covers motor traders whether they are at fault or not. This policy covers fire damage, theft, and accidents.

Factors to Consider When Availing a Cover

When opting for motor trade insurance, please consider the following tips:

1. Research the law.

Know the minimum required insurance policies required by law for your kind of business. Take note that the more cover you opt for, the more fees and premiums you will incur.

2. Honesty is the best policy.

Be extra careful when providing information to your insurance provider. You are required to be fully transparent and 100% honest at all times. Any act of deception, hiding, or falsification of any data or information will result in the invalidation of your policy. What is the point of opting to be covered and protected from unwanted accidents and circumstances when your policy can be easily canceled anyway? Avoid any slight chance for your insurance policy to be canceled or rendered invalid. It is very simple because you just have to be honest at all times.

3. Additional Products

Don’t be quick in rejecting additional covers. Always take your time to study offered additional policies as good ones can truly save you and keep your business afloat in case unforeseen events, accidents, and circumstances take place.

4. Know the required liability insurance by law.

Be clear with what kind of liability you want to be protected from. There are three kinds: Employers’ Liability, Product Liability, and Public Liability. If you have enough financial means, it is better to opt for all of the above as it will offer protection across all endpoints.

5. Study different policies.

Before opting for a policy, it will be best if you’d first fully know the nature, extent, and special needs of your business. Never be tricked by agents that offer affordable policies. They may end up damaging you in the end as they may not sufficiently cover the needs of your business. Study your business and look for a policy that will provide you and your employee the most protection.

6. Ask experts.

It’s always best to ask experts when looking for the best motor trade policy. Feel free to consult specialists that can dedicate their full time, effort, and expertise in looking for the best motor trade insurance policies for your business.

7. Update your database record.

Motor traders need to be extra meticulous and careful in updating the Motor Insurance Database (MID). Take note of the 14-day rule: if a customer’s car will be in your possession for more than 14 days, or you temporarily keep courtesy vehicle or cars, the MID must be duly updated.