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The car insurance post code lottery

Your registered business postcode can have a significant impact on the cost of your motor trade insurance policy. Depending on where your business is based, your premium could differ by up to hundreds of pounds compared with a business in another area.

The reasons for this:

Even if you are a safe driver yourself, and your employees have impeccable driving records as well, the cost to your business based on your trade insurance can be higher simply because of the risk of theft and damage in the area your business is based in.

If you are based in an inner city, then although this is likely to be great for your business due to the higher population and therefore busy nature of the city and increased number of customers, it also means that your policy will probably be higher.

How smaller towns fare next to large cities:

Smaller towns and cities by comparison will have lower cost premiums, as insurers are likely to view them as having less risk associated with them because they are less busy, with less risks and a slower pace of life.

There’s nothing you can really do about it if your business happens to be based in one of the areas which has higher premiums, as you simply have to accept that this is the case. There will be lower costs for smaller towns and if your garage, dealership or any other motor trade is based in a big city, then this it is just a side effect of being in a more populated area.

This is because of the increased likelihood and history of claims being made in these areas, which pushes the costs up for everyone else on their insurance policies. It’s not fair, but it’s how it is.

Tips for if your post code equals a higher premium

However, it doesn’t necessarily mean that you should just roll over and accept the first offer on your insurance that you receive. Experts predict that the cost of insurance is likely to go up in the coming months, so there are always things you can do to try and protect yourself – shaving a few pounds off your policy, and here are a couple of those ways:

  1. Shop around

The most important part of researching a motor trade insurance quote. It is highly unlikely you’ll receive the same quote from different insurance companies, so don’t just settle for the first insurer you get in touch with – contact a couple more before making your decision.

  1. Improve your security

Make sure you have an adequate amount of security fixtures, including alarms, locks, indoor storage where possible, etc. Highlight this on your application and you will in turn show the insurer that you make every effort to minimise the risk of theft or damage to your stock/ equipment.

  1. Review your policy regularly

Don’t just take for granted that things will stay the same. They won’t. Businesses change all the time, as does the industry, and conditions of insurance. Reviewing your policy at least once a month ensures you can check that you have the right amount of cover in case your business has outgrown its original policy.

  1. Use your no claims status to reduce your premium

Make the most of your no claims and include it in your application to gain up to a 60 percent reduction on your premium by some insurers.

  1. Define the type of business you’re in

You are likely to need proof for this, but it is highly advisable if your work is carrying out MOTs and general work, for instance, that you advertise this in your application. This is because insurers will consider the type of work as a factor in defining your premium, so if you carry out less risky work, you’re more likely to get a much lower quote.

August 22, 2014