CommercialDecember 17, 2023

The top things that affect motor trade policies

When it comes to motor trade insurance, there are some key things that could affect policies. It is important to recognise and understand these if you are in this industry, to avoid being without important protection that you need. At The Insurance Centre we want to support you in this. Take a look at our blog below which explore some common issues.  

Defective Workmanship Insurance

This type of cover is usually taken out as part of a motor traders combined policy. It provides cover for accidental damage of client vehicles whilst left in your custody and control. It is crucial that any incidents of accidental damage are notified to your broker or insurer at the time the incident occurs, otherwise the majority of these cases end up with court proceedings when the matter could have been rectified at the time of the loss.

Motor Insurance Database (MID)

Uninsured drivers currently cost UK motorists over £500 million per year*. This means every time a driver pays their insurance premium, a portion of this amount goes to pay for these illegal road users. To tackle this problem, the Motor Insurance Database (MID) was established.

The regulations place a direct obligation on motor traders to load their vehicle details at inception and update the MID immediately for any vehicle acquisition or disposal.

Which vehicles should be added on the MID?

  • All permanent vehicles insured on your motor trade policy which are your property
  • Trade plates
  • Temporary vehicles

Stock vehicles do not need to be added on the MID.

If you don’t remove any vehicle you dispose of immediately from the MID, then you could be liable for any third party claims after you have sold it if the new owner hasn’t arranged insurance. This would then affect your insurance premium.

Personally Owned Vehicles

It is common practice within the motor trade market to extend the policy to include vehicles privately owned by directors of the business.

Only directors of limited or public limited companies and their spouses are able to have their privately owned vehicles covered under a motor trade policy. Acceptance is normally restricted to a maximum of two privately owned vehicles per director and one privately owned vehicle per spouse.

You need to specifically request this extension for any personally owned vehicles to be covered under the policy.

County Court Judgments (CCJs)

Do you have, or have you ever had, a County Court Judgment against your name?

If the answer is yes, then your broker and/or insurer need to know about it. It is vitally important, and your duty to declare, any CCJs against you, be them personal or business related, as this can have an impact on your insurance policy which could be invalidated if not disclosed.

At The Insurance Centre we are here to support you. Please speak to us today for a no-obligation review of your current cover and a chat about your unique requirements. Get in touch on 01524 848506.