Motor trade insurance

Motor trade insurance is a kind of insurance cover, usually taken out by people who deal with cars to protect them from certain risks. It is also commonly referred to as the road risk insurance in some states and it can be taken by car dealers, mechanics, people who sell or repair motor bikes, valets, people who run car garages, anyone who for reasons related to business drives their clients vehicles on public roads, have vehicles owned by their clients in their business premises or home address. The policy can be taken by people who do this on a full time or part time basis. Kindly note that this kind of policy is not a preserve of big business but small businesses can take up motor trade insurance.

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What does it cover?

There are different policies that fall under this kind of insurance. These policies differ from one insurance company to the other but they can cover third party injuries, damage to the vehicles, loss of vehicles and many more. There are usually three levels to this policy. The first is third party which is the legally recognised minimum cover under motor trade insurance. It covers damage and injuries to other road users but it does not cover your vehicle and the driver. The second is the third party fire and theft policy which covers damage and injury to third parties and their property or vehicles and your vehicles damage by fire or loss through theft. The third category is the comprehensive cover which covers damage for damage to cars under your custody or that you own but this damage must be accidental.

What to consider

Some insurance covers may not cater for all types of vehicles and therefore it is good to ensure that the policy you have chosen and the company you work with cover as many types of vehicles as possible for your own good. The trade value of the vehicle is usually the basis for all insurance payments. Therefore, as you purchase the vehicles, ensure that you do so at the trade value and not the retail value. This can present discrepancies in the payment amounts leading to losses for your business.

The policy does not cover you when you use your trade vehicles or your client's vehicles for personal reasons. In order to ensure coverage during such periods, you will require to get an extension to your cover. In addition to this, this kind of policy does not provide the usual benefits that are common with private car insurance such as the windscreen. You may therefore require additional insurance for this. Remember that for this kind of insurance, the driver must have a valid driving license. Although this may differ in some states, you should have held your driving license for at least 12 months before you can be included in a motor trade insurance. So if you acquired your license at 16 years, you can get this kind of policy at 17 years and so on.