Top 5 mistakes that invalidate your motor trade insurance

By Road Runner

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Motor trade insurance is essential for anyone operating within the motor trade industry – whether you’re selling vehicles, repairing them, or offering valeting services. However, many traders unknowingly make common mistakes that can invalidate their insurance, leaving them exposed to financial and legal risks. Understanding these pitfalls is crucial to maintaining a valid motor trade policy and ensuring your road risk cover remains intact.

Mistake 1: Not disclosing modifications

One of the most frequent motor trade policy mistakes is failing to disclose vehicle modifications. Whether it’s performance enhancements, cosmetic changes, or structural alterations, insurers need to know about any modifications to assess risk accurately. Omitting this information can lead to invalidated insurance – especially if a claim arises involving a modified vehicle.

Tip: Always inform your insurer of any changes made to vehicles under your care, even if they seem minor.

Mistake 2: Using vehicles for uninsured purposes

Motor trade insurance typically covers vehicles used for business-related activities. Using them for personal errands, commuting, or lending them to friends or family can breach the terms of your policy. This is a common road risk cover mistake that can result in denied claims or policy cancellation.

Tip: Review your policy to understand what constitutes insured use and stick strictly to those guidelines.

Mistake 3: Failing to keep accurate records

Accurate record-keeping is vital in the motor trade. Whether it’s vehicle movements, customer interactions, or service histories, poor documentation can lead to complications during claims. Insurers may question the legitimacy of a claim if records are incomplete or inconsistent.

Tip: Implement a robust system for tracking all business activities and vehicle usage to support your insurance claims.

Mistake 4: Not updating policy details

Your motor trade business evolves over time – new premises, additional employees, or changes in services offered. Failing to update your motor trade insurance policy to reflect these changes can result in invalidated insurance. Insurers base their coverage on the information you provide so outdated details can lead to serious issues.

Tip: Regularly review and update your policy to ensure it accurately reflects your current business operations.

Mistake 5: Underinsuring vehicles

Trying to save on premiums by underinsuring vehicles is a risky move. If a vehicle is damaged or stolen, the payout may not cover the full value, leaving you out of pocket. This is one of the more costly motor trade policy mistakes and can severely impact your business.

Tip: Ensure all vehicles are insured for their correct market value to avoid financial shortfalls in the event of a claim.

Final thoughts

Avoiding these common mistakes is key to maintaining valid motor trade insurance. A well-managed policy not only protects your business but also builds trust with customers and insurers. Stay informed, stay compliant, and regularly review your coverage to ensure you’re fully protected.

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Get expert advice on motor traders insurance with Road Runner today.

Need help reviewing your motor trade policy? Speak to the experts at Road Runner today to ensure your cover is watertight and tailored to your business needs. Don’t let simple mistakes put your livelihood at risk.

You can get a quote here or call us on 03301 00 87 20.

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Road Runner is a trading name of Howden UK Brokers Limited, which is authorised and regulated by the Financial Conduct Authority No. 307663. Registered in England and Wales under company registration number 02831010. Registered Office: One Creechurch Place, London, EC3A 5AF. Calls may be monitored and recorded for quality assurance purposes.