When you are buying even the most simple product, it can be challenging to ensure you are comparing apples with apples, but when review an important business purchase such as trade cover things can become even more complicated.
We have mapped out the key areas for you to consider when you compare motor trade insurance policies.
#1 Insurer Claims Service
An insurer is only as good as their claims service, but the dilemma is that you only find out the true quality of that service once you are unfortunate enough to suffer a loss.
Find out the name of the insurer (not the broker) and do some research online, chances are you will soon find out how good (or bad!) the insurers' service is.
#2 Warranties and/or Conditions
Review each quote carefully and make a note of any applicable warranties or conditions.
These are stipulations which you will need to conform to or meet BEFORE a claim would be validated.
It is vital that you understand what the specific terms are and whether you can comply, else you could find that the policy you have purchased is effectively worthless.
#3 Insurer Security
These ratings will provide you with an indicative view of the financial stability of the insurer, and in turn, their ability to pay claims.
Some Insurers remain “unrated” or choose not to obtain a rating, while this does not necessarily mean they are unstable, it does provide less certainty.
We would suggest you at least make further investigations as to why they do not have a security rating.
#4 Indemnity Levels / Sums Insured
Many motor trade road risks policies work on an indemnity level basis. This means that this is the maximum indemnity the insurer will pay in the event of a claim.
You should compare this with your individual requirements and ensure that quotations have parity.
#5 Vehicles & Restrictions
Some Traders Insurance policies will also include restrictions in terms of the type of vehicles cover.
For example, policies may exclude high-performance cars, motorcycles or commercial vehicles from cover, either altogether, or for new or young drivers under 25.
Make a note of each policy restriction, and this should give you a clearer comparison across the different insurers.
Equally, if you own a recovery vehicle, trade plates or courtesy vehicles, make sure that the policy fully covers these vehicles for the required drivers and check the applicable excess.
#6 Cover Sections
Typically, trade insurance policies have sections for each area of cover from Public Liability, Employers Liability, Stock of vehicles, tools and equipment etc.
Make a list of the cover provided by each insurer under each area to:
- Ensure you have enough cover or sum insured under each section
- Review individual provisions as some insurers provide increased limits as standard
#7 Policy Excess
An excess is the first proportion of any claim for which you will be responsible. The key is understanding the different excess levels which apply to each section of the policy, for example, accident, theft or loss of tools may all carry different levels of excess.
#8 Road Risks / Premises
It sounds obvious, but if you operate from premises, make sure you have separate cover for this element.
A road risks policy will not provide cover for vehicles at a business address, and you don't want to discover that your stock or customers vehicles are not adequately protected.
#9 Drivers & Flexibility
Several options are available from named and approved drivers to any driver policies for larger trade risks. Take time to consider exactly who needs to drive and on what basis.
If additional drivers can be restricted to trade use only, then this may save you some premium, but is this workable in reality? Are use options identical across all insurers you are comparing?
Different trade insurers have different underwriting philosophies, as such, it may be worth asking questions around your growth plans and their attitude to your business development.
For example, if you are thinking of taking on an apprentice, ensure that the policy can accommodate motor trade cover for drivers under 25.
#10 Price / Premium
You may have expected to see this at number one, but you really need to ensure that all of the other sections are aligned BEFORE you can compare premium levels.
Don’t forget to include any interest charges or fees if you are looking to pay your premium by instalments.
FREE Motor Trade Insurance Review
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Book a review with one of our trade insurance gurus online or dive straight in and get a quote!