If you work in the motor trade industry – whether that’s in a repair vehicle, as a valet, a fitter, or even if you run an MOT centre or garage – you will probably have come across motor trade insurance.
Here, the team at Insure Motor Trade has tried to answer some of the most common questions people have about this kind of insurance. You can get in touch with us if you want to find out more!
Am I legally obliged to have motor trade insurance?
If you operate in the motor trade industry – then the simple answer is yes. By law, you must hold motor trade insurance.
There are several different types of motor trade insurance though – so the type of policy you need to take out does depend on what kind of work you are doing.
Although it might seem like an easy option to drive a private vehicle (such as your car) for your motor trade activities – using a private vehicle in this way will almost certainly invalidate your insurance policy.
Private vehicle insurance policies are generally written to exclude the use of the vehicles for commercial purposes, so by driving with only this kind of insurance, you are effectively driving without insurance.
This is against the law, and can leave you open to prosecution, particularly if you do end up causing an accident.
What is the difference between my personal car insurance, and a motor trade policy?
When you insure a private vehicle, both you (as the driver) and the car are listed in all the paperwork.
Motor trade policies are different – they only list the driver, and do not mention a specific vehicle.
The policy is taken out under the name of the driver – and means that the person listed on the policy can drive any vehicle, for motor trade purposes.
This means that you are safe not only to drive your own trade vehicle, but also to drive the vehicle of a customer for trade purposes – for example during a vehicle recovery.
What are the different types of motor trade insurance that I might need?
In the same way that there are different levels of personal car insurance, you’ll also find that there are different levels of motor trade insurance.
It’s worth considering which ones of these you might need – think about the cost, the likelihood you’ll need to make a claim, and how easily you could access cash-flow if, for example, you chose the minimum level of cover, but then suffered from fire or theft, which was not covered.
Would you still be able to afford to repair the vehicle?
There are three key types of insurance to consider – which are probably familiar from your experiences of buying car insurance.
• Third Party – This is the cheapest option, and the minimum you must have, to drive your motor trade vehicle legally on public roads. This level of coverage basically protects you from anybody making a claim for injury or damage your vehicle causes to other people.
So, if you damage another car, your insurance will cover the cost to that car’s owner of repairing it. Similarly if you are involved in a crash that injures somebody (either your own passengers, or other people) – this is also covered by the insurance.
This does not, however, cover you personally for injury claims.
• Third Party Fire and Theft – This type of policy covers everything listed above – but also insures you against fire and theft of a vehicle.
• Comprehensive – This includes third party, fire and theft – but also insures you to cover the cost of any damage you do to a vehicle under your control.
If another vehicle crashes in to you, and it’s their fault, you should be covered by their insurance – but if you are responsible for the damage – then comprehensive coverage will protect you from the cost of repairing your own vehicle.
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