MSN Business Directory How is motor trade insurance different? | Motor Trade Advice

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Motor trade insurance is different, right?

Yes it is. A motor trade insurance policy differs in a number of important ways from the kind of insurance policy you will take out for your own personal, private car.

To benefit from a motor trade insurance policy, you have to be able to prove that you are in the motor trade.

Sounds obvious, but there are some people who will claim that they are motor traders part-time so they can get hold of a policy which (they think) allows them to drive every car they want.

Claiming to be in the trade, and then being found out if you’re not, will invalidate an insurance.

I’m definitely in the trade

If you make your living in the motor trade, you are required by law to have a valid insurance policy specifically for your activities.

If you don’t have this policy, you and your business have no protection if something goes wrong. If you do any of these activities, you need motor trade insurance: car sales; breakdown recovery; vehicle collection/delivery; vehicle restoration; SMART repairs, coach building; valeting; and MOT services.

It’s the law

You have to have at least third party only insurance. That’s the law.

This can also be known as road risks insurance and is the very lowest form of motor trade insurance. It protects against death or injury to other people (third parties) or damage to their property caused by vehicles belonging to you.

Extra cover

It might be possible to arrange extra cover for other types of business use, but it is something you should discuss with us first.

For instance, if you are in the motor trade part time, but do something else as your main job and use a vehicle, you might be able to arrange for cover for Additional Business Use, which would protect you for both of your trades.

This would probably cost a bit more. If you use one of the vehicles you have for your business as your main family car for your personal use, you might be able to arrange cover for it but, again, it is something you should speak to us first about.

This is also likely to increase the size of your premium.

Other drivers

There is a persistent myth about motor trade insurance that it allows anyone to drive your vehicles. It doesn’t.

Just like the insurance on your private car, only people you have named can be added to your policy and their names appear on the policy documents.

Nobody else is covered by your policy. You can, of course, put extra people onto your motor trade insurance policy but you have to tell us who they are and, just as importantly, what classification of insurance cover they need.

If it is an employee, it might just be motor trade use but if it is a member of your family, for instance, the cover might also include social and domestic use.

If you are selling cars and want customers to take test drives, you will need to make sure that you have demonstration cover.

This allows members of the public to drive any car from your stock in the presence of a named and insured driver.

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February 14, 2014

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