Q. Do I need to be registered with an authority or indeed be a member of an organisation before I start motor trading?
A. The short answer is No you don’t, however you do need to run your business properly and be able at any stage, if asked, to provide written evidence of a motor trading activity.
Q. Having taken out my policy should I disclose any changes in my circumstances?
A. Yes you should, indeed it is a policy condition that you inform your insurer of ANY material changes to your circumstances. Your insurers have a legal right to re-assess your risk which may lead to an increase or indeed a reduction in your premium.
Q. Are my personal vehicles covered?
A. If you have disclosed them properly at the policy inception or after you have purchased a new vehicle after inception you will be covered, you must always check however that your vehicle does not fall into a restricted or unacceptable vehicle area by checking your insurance policy or calling your agent. Make sure also that new vehicles purchased and indeed vehicles sold are advised to the MID – IT IS YOUR RESPONSIBILTY.
Q. How can I notify the MID of the vehicles I buy and sell?
A. You will be provided with either the website of your insurer (you will need to register) or you will be given an e-mail address, all updates are then recorded and passed to the MID by your insurer. It is your insurer who only has 7 days to get this information on the system so don’t hang around until the last minute!
Q. When will my cover start?
A. In short, as soon as you have paid for it. If you use a debit or credit card cover can start immediately assuming you have all the right information to hand (current vehicle stock details AND registration numbers). If you send a cheque or postal orders cover will start on their receipt, do not assume you are on cover always check first and preferably wait until you have received your cover note.
Q. Can I add other drivers to my policy?
A. Yes you can, but remember this is a business policy and the drivers added (other than your spouse) should be employed by your business either as a business partner or an employee. Please don’t make things up! Insurers will check that employees for example have proper payslips showing their N.I contributions and tax and worse of all they could and indeed will refuse to indemnify a claim if they find out.
Q. Can I borrow my relatives or a friend’s vehicle?
A. No you cannot, a road risks policy is designed for your OWN vehicles whether you intend to keep them or sell them on. It also provides Motor trade cover for your CUSTOMERS vehicles, in a nutshell then the policy covers any vehicle that you own or your customer. Evidence will be required if the car belongs to a customer, that you have worked on it for monetary gain.
Q. What is an "Indemnity Limit"?
A. When you insure an individual vehicle on a private car policy it is usually quite clear what its value is and therefore the insurer has an idea of the risk involved, however on a trade policy there has to be a way of governing the risk as numerous vehicles are covered. This is done at the quotation stage between you and your agent whereby it is decided by you to what level you are likely to go to when purchasing vehicles. Bear in mind of course that the higher this level is then the higher the premium will be.
Q. Can I use my trade insurance policy for any other non-trade occupation?
A. No you cannot, unless you have advised the agent at the quotation stage where-on the premium calculated will include the extra use (should it be acceptable!). Most acceptable occupations fall into the building and allied trades but you must make sure that you have an active motor trading business as well – Your insurers will check!
Q. What if I leave or store my vehicles away from my home?
A. The motor trade road risks insurance policy was specifically designed for traders using their homes as a base, because most people have a parking restriction at home it usually governs the risk in that there are not too many vehicles there at any one time. As a result of this the premiums are far cheaper than those of traders using separate business premises. Therefore your insurer will ONLY provide cover whilst you are on the public highway, at home or parked in the course of a journey. You WILL NOT be covered if you store vehicles at someone else’s house or maybe a farmer’s outbuilding or indeed trading premises away from home.
Q. Can I have protected bonus?
A. Protected bonus is available on nearly all motor trade policies and it can usually be protected at ALL stages, even if you only have one year’s bonus. It should be noted however that there are always qualifying conditions for this addition and all insurers are different, if in doubt ask your agent. Remember you can’t add it after you have taken out the policy or renewed it.
Q. What happens if I drive a vehicle which has a higher value than my chosen indemnity limit?
A. We would never advise you to do this, if you find that your vehicles are regularly worth more than you are insured for you should simply call your agent and increase the limit. You will be surprised how cheap it is! If you have a vehicle written off or stolen you will simply receive the maximum amount your policy covers you for assuming of course that the vehicle is actually worth that much. (You are only covered for the trade value on ALL trade policies).
Q. Can I change my policy cover mid-term?
A. With most insurers you can assuming you give a suitable explanation for it, but there are one or two insurers who will not. Check before you buy!
Q. What do I do in the event of an accident or theft?
A. If you have purchased the "uninsured loss recovery" (sometimes called "legal" cover) scheme at your policy inception, you will have been provided with the appropriate contact details. Please call them directly and they will make ALL the necessary arrangements including completing your paperwork, arranging repairs via your insurers or direct with the third parties insurers. They can even arrange a hire vehicle if you qualify and of course arrange any necessary litigation for personal injury.
Q. Will I be refunded if I cancel my policy?
A. This depends on a number of things, how long have you been covered for? How much have you paid? And why do you want to cancel? All of these issues affect the charge your insurer will make and of course your agent will charge aswell for their time and effort. All insurers publish their cancellation charges in their policy documentation and your agents fees are noted in their "terms and conditions" the details of which will also be in your paperwork.
Q. Can I tow a trailer?
A. Yes you can, if the vehicle being driven is properly insured and on the MID then you will automatically get "Third Party Only" cover to tow a normal box or car trailer, even a caravan or a disabled vehicle will also be covered. If you need better cover call your agent.
Q. Am I covered to carry my own or my customers vehicles on my recovery truck?
A. It is important to remember that if you give ALL the facts to your agent, they WILL find you the most suitable policy! In our case we could provide you with Comprehensive cover for vehicles being carried FREE OF CHARGE as long as you have advised us that you need the cover!
Q. What is "Accompanied Demonstration Use"?
A. This is a policy extension that allows your customers to "test drive" a vehicle you have for sale as long as you have checked a few things before hand. Firstly your customer MUST hold a Full UK driving licence and you MUST have seen the original (no copies). Secondly you must accompany the customer as a passenger at all times. Thirdly the customer cannot and must not either be related to you or ANY of your employees. Be Careful!
Q. Can I transfer my no claims bonus from my car policy?
A. Yes you can, you can even keep the bonus on your separately insured car and we will allow an introductory bonus of the equivalent amount. Note however that if you were to stop trading and revert back to a private car policy there are quite a few companies who will no longer allow the bonus because it has been used on a commercial contract.
Q. How many vehicles do I have to buy and sell to constitute a business?
A. It depends on the insurer you end up with and also whether you are running a full or a part time venture. There are no set rules but your activity level has to make sense! For instance if you are a full time trader with a business partner and you only go through 2 cars in a five month period I think your insurers would be right to be curious as to how you are paying the bills! Generally I think if you are part-time you should see at least one vehicle per month and if you are full time I would say a minimum of 5 per month.
Q. If my vehicle is written off or stolen will I get the full value?
A. Motor trade policies are not there to protect your potential profit in a vehicle and thus you will be paid the trade value of each vehicle you own, assuming of course that the value falls within the indemnity limit you chose at the policy inception.
Q. Why do I have to pay administration fees for policy amendments and lost documents?
A. Because we are running a business and it costs time and money to process amendments along with the advice often needed and given. All our company charges are clearly shown in our "terms and conditions" but if you are in any doubt call us.
Q. Will I get a discount if I recommend another person?
A. Yes you will, normally and only if the new customer accepts a new policy with us we will give you a £25.00 discount from your own policy. This will be deducted from your next renewal premium, so the more referrals the cheaper your next premium will be!
Q. Can I pay by instalments?
A. Yes, there are numerous methods from the usual direct debit schemes to shorter term plans over a few months. Ask about them at the quote stage.
Q. Can I have a road risks policy if I trade from premises away from home?
A. Yes, but be careful as the road risks policy is really designed for people trading from home so although you can have the policy you will have little or no cover at work or even within a quarter mile radius of the building. If you need better cover you will need the Traders combined policy. Ask for details.
Q. What if I buy a high performance vehicle?
A. There are lots and lots of different types of high performance vehicle, from Porsche to Ferrari and the usual Impreza WRX and Mitsubishi Evo. Without a doubt they present a much higher risk to the insurer of theft, personal injury and even death, as a result these types of vehicles carry a lot of policy cover restrictions and in some cases are not covered at all. Please pay careful attention to your policy wording and if you are in ANY doubt call your agent before committing to the purchase of such a vehicle.
Q. Do I have to disclose driving endorsements and criminal convictions?
A. Unfortunately insurance is a risk business and you (the customer) form a great part of the risk to your insurer, therefore if you have been convicted of a driving offence it is fair to say that you will or may present a higher risk to the insurer than someone with a clean driving licence. The same goes for someone with a criminal record where their character is taken into consideration, we can however accommodate people with a whole range of convictions so tell us everything and we’ll make sure you have the right valid contract.
Q. Do I have to hold a Full UK driving licence?
A. Yes and you must also have held it for at least 12 months (if you’re close to 12 months we may be able to help). This applies to all drivers on the policy, if you have been previously banned from driving and ordered to re-take your driving test we will always look at the date you originally passed.
Q. Do I have to be a permanent UK resident to qualify?
A. Normally you have to permanently reside and are a UK resident for at least 3 years although if you are not far behind you can still call us and we may be able to help.
Q. Can I have a hire vehicle following an accident?
A. It is not always possible because being a trader in the eyes of the law you should already have access to numerous vehicles, we accept that there are always exceptions to the rule and would look at those cases on their own merit.
Q. What happens if I don’t do any trading for a number of months?
A. You only qualify for a trader’s policy because you have told us that you are an active motor trader, you must therefore make sure that you trade or alternatively cancel the policy and take out another when you are. Remember you will be asked for evidence of trading at any time and if you cannot provide the policy will be invalid.
Q. Can I drive a previously damaged or stolen vehicle which has been categorised?
A. Generally you can, if it carries a "C", "D" or "X" category and it is fit for the road with an up to date MOT certificate then it should be ok. Check your policy though because some insurers don’t like them and they may be excluded. Ring your agent if you are in any doubt.
If your business premises are away from the home and you are looking for comprehensive cover, a combined motor trade policy maybe a more beneficial option. Click here for details.