Traders Policy Rules
Make sure you know what you can and can’t do on a Motor Trade insurance policy by knowing what the Traders’ policy rules are.
Ensuring you know what the Traders policy rules are, can help you avoid having your Motor Trade insurance policy cancelled or made void.
Road Traffic Act 1988
One of the main Traders policy rules is that it’s a legal requirement to have Motor insurance if you intend to drive on UK roads. As most motor traders will probably need to drive on public highways, this makes having at least a Road Risk insurance policy, essential for anyone working in the motor trade.
Are You a Genuine Motor Trader?
Before even considering taking out Motor Trade insurance, it is essential that you determine your suitability for a Motor Trade policy.
Many people attempt to take out a Motor Trade policy, only to find out that they are ineligible. To put it simply, to obtain a Motor Trade insurance policy you must be considered a genuine motor trader with a financial investment in the industry. If you just fix up the odd car here-and-there as a hobby, then this won’t include you. Regardless whether you’re part-time or a full-time trader, this rule still applies.
When applying for insurance you will be requested to provide proof of trading. As a trader, you should always keep receipts of all the vehicles you buy and sell, and all transactions for any service or work you carry out for customers. Don’t worry though! It’s not as complicated as it sounds; you will normally be given instructions and an allotted time period for you to gather these details and provide the evidence to the insurer.
Motor Trade Insurance Or Part-Time Motor Trade Insurance?
If you operate as a motor trader on a part-time basis then you must disclose that fact when enquiring about a Motor Trade insurance product. This is because we are unable to offer a Part-Time Motor Trade insurance policy for some occupations.
Those who take out a Motor Trade insurance policy intended for a full-time trader, but actually work part-time, could risk their policy being cancelled or made void. Therefore, we encourage you to be honest about your motor trade business, as that’s the best way we can get you a Traders insurance policy that works for you.
The Two Different Types of Motor Trade Insurance Policies
As a standard, there are typically two types of Motor Trade policy available – Road Risks, or a Combined policy.
Road Risks – This policy is available with 3 levels of cover. You have the option to choose from Comprehensive cover, Third Party, Fire & Theft cover, or Third Party Only cover. It’ll provide protection for you when trading from home and you can be covered to drive multiple vehicles on the road, whether they’re your own personal vehicles, or customer vehicles under your custody.
Combined – This cover is necessary if you need to operate out of premises that aren’t your home. This policy also allows you to enhance the cover with any extras that are necessary for you to practice your business safely. This cover can include Road Risk cover as well as protection for your assets, vehicles, tools, stock and money, amongst other things.
Motor Trade Insurance Under 25
It’s not a hard and fast rule in Motor Trade insurance that you need to be over 25 to be eligible for Motor Trade cover, however those under the age of 25 looking for a Traders Policy will find it difficult. Those who successfully take out a Motor Trade Insurance Under 25 policy will find it has its own set of unique rules, and it’s important to understand them if you are under 25 or wish to add an employee or spouse that is, to your policy. For some insurers the rules might be a little bit different, but these are the general requirements and rules for Motor Trade Insurance Under 25:
- Minimum age of 23 to take out a policy
- Minimum age of 21 to be added to a policy
- At least two years driving experience required
- At least one year of No Claims Bonus required
For traders under 25, in addition to the above, there are stricter rules regarding the location of the business, where the vehicles are kept, and insurers may ask for an additional excess to be added to the policy.
Also, due to the high cost of insurance for young drivers, some people may be tempted to try and take out a Motor Trade insurance policy and add a young driver under the guise of being an employee, to enable them to get a cheap policy. DON’T BE TEMPTED TO DO THIS! This is called fronting, and is illegal!
Vehicles You Work With
When taking out a Motor Trade insurance policy you will be asked for details about the type of vehicles you work with, as high performance and high value cars will often cost more to insure, due to the potential payout in the event of a claim. It’s important to be honest about the value of the vehicles you work with, because if you end up making a claim and you weren’t honest about the value, your claim could be rejected. Furthermore, you may even find that the policy gets cancelled or voided, leaving you out of pocket and having to cover the costs yourself.
Some Rules Vary Between Insurers
Whilst there are general rules when taking out a Motor Trade insurance policy through Think Insurance, there will be rules that are specific to your insurance provider, and these will be detailed in your policy documents. Always make sure you read your policy documents so you know exactly what is and isn’t covered by your insurance, and you know what rules apply on your policy.
Traders Insurance Quote
Knowing the Traders policy rules and the rules specific to your policy isn’t the only important thing about a Motor Trade policy. It’s also important to check that everything you need covering is covered by your insurer, and that’s where we can help. We’ll do our best to match your motor trade business to an insurer from our handpicked panel of Motor Trade insurers, so that you get a policy that protects your business and works for you.
To find out how much cover might cost, click ‘Get a Quote’ below or you can call us on 0800 221 8077, where we can clarify the Traders policy rules for our insurers.
Why Choose Think Insurance for a Traders Policy?
As a specialist Motor Trade broker, we have a team of expert advisors that can put together a policy that is tailored to your needs and the needs of your business. They take special care to ensure that you get the perfect policy for you, and offer helpful advice in regards to your insurance.