How to qualify for motor trade insurance

You should consider motor trade insurance if you work in the automotive industry. Your job often involves working with expensive vehicles and parts, and you could put your business in hot water legally and financially without adequate protection.

Like other forms of insurance, motor trade insurers have specific criteria you’ll need to meet to qualify. If you’re wondering whether your business is likely to be eligible, keep reading.

Information motor trade insurers are likely to request

When getting a motor trade insurance policy, insurers will ask for several details related to your business. This is to understand the type of level you require and to see whether you meet the criteria for their policy. Certain factors can affect the quote you receive and, in some cases, can make you ineligible for motor trade insurance.

They’re likely to ask for the following:

  • The type of business you run
  • Details of vehicles registered with the business name and the name of a director, partner, or proprietor of the business
  • The value of the registered vehicles
  • Driving licence information
  • Information of any driving convictions
  • Where you work—is your business based at home, on business premises or both?
  • The sum of your business stock you want to insure, including contents, tools, vehicles and buildings
  • The number of employees and the annual payroll of your business
  • Your business’ annual turnover
  • The level of vehicle cover required

How do you qualify for a motor trade insurance policy?

Most motor trade policies require you to be above the age of 23 and operate within the trade industry. This covers a range of jobs, including buying and selling cars, fitting tyres, and servicing vehicles.

Insurers will ask you to provide documents proving you operate in the motor trade industry. They may ask for one or more of the following:

  • Copies of purchase invoices and sales receipts for vehicles bought and sold
  • Auction house invoices
  • Proof of joint bank account for business partnerships
  • Copies of invoices
  • Submission of accounts
  • Your driving licence

What factors affect qualifying for a motor trade insurance policy?

Even if you can prove you work in the motor trade industry, several factors can still affect someone’s eligibility for motor trade insurance. From age and occupation to the types of vehicles you own, insurers have specific rules and restrictions that may prevent someone from qualifying. These can include:

  • Vehicle exclusions. Some insurers may not cover vehicle types, so it’s best to check first. Ask the provider for a list of the vehicles they insure.
  • Age restrictions. Many motor trade insurers only provide cover if the policyholder is 23 and over. A younger driver may be permitted on the policy as an additional driver, but not as a policyholder.
  • UK residency. Policyholders are usually required to have been UK residents for 3 years or longer. Some insurers may also not provide cover for residents in Northern Ireland.
  • Occupation restrictions. There are some jobs that insurers may not cover. These often include scrap or salvage-related businesses.
  • Restrictions for drivers with previous convictions. A driving conviction doesn’t mean you’re automatically ineligible for motor trade insurance. However, it’s a legal requirement to declare any convictions when applying for cover.
  • Driving licence. You must hold a full UK driving licence to take out motor trade insurance. There may also be restrictions based on the length of time drivers have held their licences.

What businesses can you get a motor trade insurance policy for?

Taking out motor trade insurance should be considered for anyone involved in buying and selling, servicing, repairing, restoring, or transporting vehicles. This could include:

Is motor trade insurance a legal requirement?

Unlike vehicle insurance, not all types of motor trade insurance are a legal requirement—but it can provide cover required for certain liabilities by law. Without it, your business could face financial or legal difficulties if something goes wrong.

Perhaps your premises gets damaged, or a customer is claiming compensation due to a problem with your car repair services—whatever the case, you could be liable for costs or legal issues without adequate cover.

Third party only cover is a legal requirement for businesses that:

  • Drive their own or their customers’ vehicles on public roads
  • Repair, service, or restore vehicles
  • Buy and sell vehicles
  • Provide car valeting services
  • Run a garage or MOT station

This policy covers you and your employees in the event of a third-party injury, third-party property damage, or third-party death caused by a vehicle associated with your business.

Get your motor trade insurance quote

At ChoiceQuote, our specialists are always happy to advise on which motor trade insurance policies may suit your needs. Contact our team by calling or get a quote online in minutes. To see what other services we offer, visit our Motor Trade Insurance page.

The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. We do not accept any liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.