When it comes to Motor trader insurance we’re often asked what level of cover, or indemnity as it’s referred to, do I need? The biggest factor in this decision is the position you hold or the company you own. If you think about the level of indemnity someone such as a mechanic is going to need, it is more than likely going to be a lot different to the level required for a valeter. Heres some helpful information to help you make the right choice.
If your own personal vehicle is only a fairly cheap car then it will probably be a better idea to get a split indemnity. i.e A car jockey (with a £3.5k Astra) may choose to get cover for his customers vehicles of say £30k, but only cover his own vehicle for maybe £5k. This turns out a let better than taking out a cover of £25k for both the customers vehicles and your own.
Say for instance, if you own a second hand dealership, you need to think about what cars you will mainly be selling. Are you really going to need cover for £25k if you are only dealing with cheaper cars such as 10 year old Corsas? Probably not, and remember if you start out with a low indemnity you can always increase it later on in the year if you need to.
At the other end of the scale, if you are a high-end valeter dealing with luxury cars then you are most likely going to need to get a pretty high indemnity. You may find that some customers require proof of suitable comprehensive cover before they allow you to take their pride and joy. Specialist policies can extend road risks cover to £100k and over in certain circumstances. when it comes to these policies, you will usually find that you will be paying more for them due to what they are required to cover.
Third party may be enough cover for some. Someone who is working within the scrap car and salvage business is unlikely to need anything more. Their only real risk would be for the vehicle they were driving as the vehicles they collect or dismantle might not be worth much and would be on the back of their truck – also for this type of motor trade business a lot of trade insurers will only give Third Party Only.
Purchasing a level of indemnity is a calculated risk on your behalf. When it come to traders insurance, it is your responsibility to choose the level of cover that is required. An example – you’re a mechanic and you drive people’s cars. One day you crash a customer’s vehicle (your fault) and do £8k worth of damage, but you’ve only got £5k of cover. The insurance will only pay out a maximum of £5k so what about the rest? Who pays the £3k leftover? That’s right, you!
Remember, a good broker can help and advise you on what levels of Motor trade insurance you need. They should be able to find you a policy that fits your needs, rather than make you fit the policy. If you are unsure about anything, make sure that you get advice from a professional.