Motor Trade Insurance – terms which may apply to your policy

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The following is intended as a guide to some of the common terms and conditions which can be included in a Motor Trade Road Risk Insurance Policy. Not every policy is the same & wordings differ from insurer to insurer. Please refer to your policy certificate, schedule and document including cover sections, exclusions & endorsements for full details of cover.

You may have a motor trade road risk insurance policy and not be aware of what is covered or more importantly, what is not covered. Your policy could include some of the following terms, conditions, warranties or endorsements.

Limitations as to use:

The limitations as to use will vary with every policy. Some examples of limitations are as follows:
1.  Use solely for motor trade purposes.
2. Use solely for the parking of customers vehicles.
3. Use for social domestic and pleasure purposes.

Excluded vehicles:

The Motor Trade Insurance certificate and policy will specify vehicles which are covered under the policy and may exclude:
1. Motor cycles, vehicles for hire, steam driven vehicles, modified or altered vehicles, Agri-vehicles, plant or machinery, American or Canadian vehicles, mobile catering vehicles, any vehicle hired or loaned from you.
2. Vehicle transporters – (limited transporter cover may be available).
3. Vehicles being transported, conveyed or toed.
4. Any motor vehicle owned and/or registered to individual directors, business partners, employees, spouse, common law spouse or partner, sons, daughters, other family members or named drivers.
5. Any vehicle on business/ trade premises/forecourt/vehicle compound.
6. Vehicles with a certain gross weight and/or Vehicles with a high value.

Drivers or classes of drivers whose driving is covered:

As specified in the certificate of motor trade or garage insurance. The following options may or may not be covered:
1. Persons named in the certificate for business and social use.
2. Persons named in the certificate for business use only.
3. Any customer who is driving a vehicle loaned to him by the insured whilst his/her own vehicle is being repaired.
4. Any person authorised by the insured who is driving for demonstration purposes provided he is accompanied by the insured.
5. Persons specified in the schedule but reduced cover may apply.

Duty of disclosure:

All motor trade insurance policies will carry a duty of disclosure clause which outlines your duty to inform them of any material changes during the year. In addition the proposal which you complete is considered to be part of the contract and it is essential that all questions are answered honestly and accurately. Insurers can void the policy if they discover non-disclosure or wrong information submitted in the proposal form.

Basis of contract – The motor trade policy document will specify the cover provided and may read as follows:

We will provide insurance subject to the terms of this policy, during the period of insurance, whilst the vehicle is:
1. Being driven in a public place or temporarily parked or garaged in the course of a journey.
2. Parked at the private domestic dwelling of the insured or a person named in the schedule.
3. Parked on a public road outside a one mile radius of a business premises as described in the certificate but excluding:
4. Theft/larceny whilst the insured vehicle is located within a one mile radius of the business trade premises. (Where the private dwelling and business premises are at the same address the policy may be further endorsed to cover theft subject to an increased excess).
5. Any loss or damage whilst the insured vehicle is on any premises/forecourt/compound owned or occupied by the insured or any business partner, director, employee, common law spouse, family members etc.
6. Accidents occurring outside Ireland & The United Kingdom.

Conditions before paying a motor trade insurance claim:

Prior to paying a claim, insurers may specify that:
1. You have complied with terms, conditions, provisions and endorsements of the policy.
2. No exclusions apply.
3. You inform them immediately and furnish all relevant information to them.

Legal liability exclusions which may apply:

1. Liability claims arising out of injury to any driver covered under the policy.
2. Injury to any person whilst in/on any trailer covered by this policy.
3. Injury to any passenger not being carried legally.
4. Loading or unloading any vehicle.
5. Injury to employees.

Accidental damage, fire or theft to an insured vehicle may exclude:

1. A limit of indemnity per vehicle/loss and an aggregate annual limit will normally apply.
2. Loss or damage to an insured vehicle as a result of deception or fraudulent action by a purported purchaser.
3. Loss or damage where reasonable steps were not taken to secure the vehicle.
4. Theft within one mile radius of the business or motor trade premises.

Endorsements which may apply to the policy (as specified in the schedule):

1. Third party only demonstration cover may be included.
2. Increased excess may apply.
3. Cover may be extended to cover heavy goods vehicles.
4. Limit any one vehicle may be increased or decreased.
5. Third party cover may apply to customers who are driving a garage vehicle whilst their own vehicle is being repaired.
6. Trade plate extension may be included.
7. Car jockey extension may be included.
8. Motor cycle cover may be included.
9. Exclusion of malicious damage may apply.
10. Exclusion of larceny whilst not garaged.
11. Larceny within one mile of the insured’s premises may be covered subject to an increased excess.
12. Specified drivers and/or provisional licence holders may be restricted to third party, fire and theft cover.
13. Specified trailers may be included.

If you would like a quotation, please call us on 049-4332944, e-mail or complete our online enquiry form.

Disclaimer: The material contained is this article is for general information purposes only and does not constitute professional advice.

James Martin
James Martin
James Martin has 16 years of experience as a general insurance broker. He is a member of the Chartered Insurance Institute and has completed a Diploma in Corporate Finance.

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