What Is A Motor Trade Insurance Policy?

If you are in the car business, it's likely that you may have heard about motor trade policies which are vital to such operations. However, there are several conflicting thoughts about such policies; while some business owners believe that this type of cover is unnecessarily expensive and does little for the company; a large number of business operators believe that the benefits of such cover is vital to the success of a car venture. As per the law, you are required to own such cover if you intend to operate in the car sector. If you are mulling over the purchase of such a policy, here are answers to some of the crucial questions that you may have.

What is a motor trade policy?

This is a type of insurance cover specifically designed to meet the needs of business owners operating in the car sector. Several vehicles can be simultaneously added on such a policy and it covers the operator and owner against a host of undesirable eventualities.

What is the primary benefit of such a policy?

When you purchase trade cover, the insurance company will usually add the vehicles to the MID which is a database of insurance companies that is also used by the police to trace vehicles and their policies. Any vehicle used by the trader should be added to the database in 14 days or you risk the seizure of the car. Ideally, you can simply let your cover provider know about a vehicle that you intend to operate for ten days or more so that they can add the vehicle to the database; it usually takes 48 hours for the car to reflect in the MID database.

It's worthwhile to understand at this point that most companies will not charge you for adding vehicles to a motor trade policy.

What is the minimum age at which a business owner can get a trade policy?

Although there is no minimum age for the purchase of such a policy, you will end up paying higher premiums if you are young. So a person below the age of 24 will need to pay significantly more than a business owner who is in his forties.

What does indemnity in such a policy stand for?

Trade cover for the vehicle will come with an indemnity which is the maximum amount of money that the cover provider will pay in case of a singular claim. This of course does not mean that you will need to pay the Jaguar owner if you trash his vehicle. The indemnity level will only kick in when there is no third-party claimant.

How many vehicles can you add to such a policy?

There are no limitations on the number of vehicles that can be added to such a policy; also there are no additional charges for adding a car. However, you will need to check with the cover provider to get additional information about any extra charges that you may have to incur in case the number of vehicles exceeds a certain limit.

Can you use a trade policy even if you are a part-time trader?

Yes, you can. As a matter of fact, a lot of business owners prefer to restrict their trade activities to weekends and you will find that a motor trade insurance policy is reasonable enough to suit your requirements.

What would be an appropriate excess amount for a trader?

Most motor trade insurance policies come with a 250 pound excess; this can be raised further if you would like reduce your premiums. Many companies will offer you 10% of excess, which means that you will be liable to pay 10% of the claim value. Since the provision for excess varies among providers, it is best to consult a broker or discuss it with a representative of the company.

For further information regarding motor trade insurance visit Swinton one of the UK's leading insurance companies.