Your own vehicles
Most motor trade insurance road risks only policies will exclude vehicles whether owned or in your custody or control at your trade premises. Own vehicle insurance can be largely misunderstood when it comes to location under a road risks only insurance.
Although insurers policies may vary in their wordings, they are usually all saying the same thing.
Own vehicle insurance – so where are they covered?
The best way to understand own vehicle insurance, is separate Road Risks from Premises Risks. Quite obviously Roads Risk does exactly what it says on the tin, on the road!
Dependent on the insurers wording and depending on where the vehicle is situated determines whether any loss would be covered under Road Risks Insurance or Premises, when it comes to premises theft for instance then a car parked on the forecourt albeit next to the road would be claimed on premises.
Own vehicle insurance – how do I cover them correctly?
It is important that the correct level of cover for own vehicle insurance is selected at your trade premises under the Material Damage section of a motor trade combined policy. The material damage section covers many items such as your Hand Tools, Machinery & Plant etc.
When arriving at a figure for your own vehicle insurance it is important to understand exactly what you want covering and where.
Whats an own vehicle? You would assume that an own vehicle is those owned and registered to you – in most cases you would be correct in assuming this. However, a bodyshop for instance may have loan vehicles that are leased, whilst these vehicles are used in the business they are loan vehicles and not used as personal vehicles. Loan vehicles leased in have to be included under own vehicle insurance.
Now we are happy that we understand what an own vehicle is how do we provide a “sum insured” for the own vehicle insurance section of the policy?
We can’t obviously tell you how much, but we can assist in you arriving at the correct figure.
Firstly you need to arrive at a figure based on market value, if you have a number of vehicles and some don’t stay on your premises or even visit the premises – should you include these vehicles? What you are covering is the own vehicle value “at the premises”, NOT the value of all of your vehicles.
Own Vehicle Insurance – what value should I use?
Should you have a loss, insurers will pay out based on “Trade Value” of the vehicle in question. As long as you understand this you won’t be disapointed in the event of a loss.
In reality this is slightly different and most insurers will take a view on it. If your business is Car Sales, they may very well agree a settlement on trade value as you have direct access to trade vehicles, a Body Shop or MOT Test Station is unlikely to have access to trade vehicles and the outcome may be different. In our experience its quite rare that a dispute arises.
When is an own vehicle not an own vehicle?
Vehicle ownership can also an insurable interest issue, if a vehicle is personally owned by a director and not the policyholder then their interest must be noted on the policy for cover to be in force. Lets explain
Without getting to technical, if you are a director of your company and the vehicle is “personally” registed to you, the vehicle would not be insured. The wording of most insurance policies would exclude, amongst other things, vehicles owned by directors or employees – you are both.
Therefore when considering own vehicle insurance you need to ensure that all vehicles are owned by “the policyholder”. This usually is easily fixed, you need to ensure that you make the insurer fully aware of the fact, in most instances vehicles personally owned by directors can be included but the have to be specified. Vehicles personally owned by employees who are not directors cannot be added.
Please remember this content item relates to vehicles held at the business premises & questions that need to be considered when selecting cover include :-
Are all vehicles owned stored at the premises?
Do you have a second address for storing vehicles; this could be your home
address but you may also trade from there ? If so, this has to be noted on the policy schedule for cover to be in force.
Own vehicle insurance is quite straight forward, it can be complex as you have possibly seen from the above, however when you take out motor trade insurance you need to be dealing with people who understand your business.
You may also be interested in: Customer Goods Insurance