Motor Mechanics
Insurance

You will hear various insurance terms bandied about, often by people who know little about the subject. Lets look at some of the terminology.

Motor trade insurance:

A generic term used to describe any insurance contract relating to the motor trade.

Motor Trade Combined Insurance:

Used to describe a contract which covers vehicles on the road plus property at the policyholders trade premises, and would normally include cover for public and employers liability.

Road Risks Only policy:

This refers to cover for vehicles whilst on a road or other place where the vehicle is subject to compulsory insurance under the law. It also indicates that it is a stand alone policy. That is to say, the insurer does not include any cover for stock vehicles or contents at the trade premises or for public or employers liability.

Historically, Road Risks Only insurance referred to a third party only motor trade road risks policy, but that definition has largely disappeared in the past twenty to thirty years as many insurers no longer accept business on a third party only basis. In recent years insurers preference is to provide only comprehensive cover.

Road Risks Policy:

This will normally be a road risks ONLY policy as above, but could refer to the road risks policy which is able to be extended to include additional cover. For example it is possible to extend some road risks policies to include cover for damage to vehicles whilst being carried on your vehicle transporter or trailer.

Cover available for motor mechanics

  • Your own vehicles up to a maximum value which you choose
  • Your customers vehicles up to a maximum value which you choose
  • The higher the value you select, the more expensive your policy will be

A typical example would be a 30 year old mobile mechanic with a van for work worth about £12,000 and a car for family use worth about £7,000. In this example the mechanic normally works on standard type cars up to about £20,000 in value. We would offer this mechanic an indemnity of £15,0000 on own vehicles and £30,000 on customer vehicles to ensure there is some margin so that the mechanic is not too restricted in what he can work on.

There are some exclusions and restrictions on a road risks policy. As always, to complicate matters, each insurer has its own terms. Here is a broad outline of the main exclusions under a typical road risks policy.

Typical Exclusions:

  • Damage to any vehicle being towed or transported
  • Vehicles parked on or near any trade premises owned or occupied by you are excluded (you will need additional insurance if this cover is required)
  • Vehicles over 3,500 kgs gross vehicle weight are excluded. However, most insurers will increase this to 7,500 kgs for an additional premium. At the time of writing, only one insurer will provide cover for vehicles over 7,500kgs on a road risks only policy.
  • Vehicle transporters which carry more than two vehicles
  • Motorcycles and quad bikes
  • Loss or damage for any of the following:
    • American or Canadian manufactured vehicles
    • Q plated vehicles
    • Certain vehicles of a high performance or sports nature
    • Buses & coaches
    • Plant and machinery
  • Any value in excess of the indemnity limit you have chosen
  • Customer vehicles being used for pleasure purposes

Most if not all of these exclusions can be changed if your circumstances dictate that you need the cover. However, the more you move away from the standard contract of insurance, the more expensive it is likely to become.

Some additional cover which can usually be included depending on the insurer involved:

  • Motorcycles
  • Vehicles over 3,500 kgs
  • Vehicles over 7,500 kgs
  • Cover for damage to vehicles transported or towed
  • Windscreen cover
  • Courtesy cars
  • Protected bonus
  • Legal protection
  • Vehicles on the trade premises
  • Tools and equipment

Additional cover which may be required:

Liability Insurance

As a mechanic, you may want to consider taking out liability cover. Liability insurance is unlike car insurance, in that you do not submit a claim for payment by your insurer. Instead, a member of the public or a customer may have a legal right to make a claim against you, where they believe you have been negligent. The best example of this is where a repair goes wrong and the repaired vehicle is totally destroyed as a direct result of the incorrect or negligent repair.

In this case you would report the incident to your Liability insurer, who would then deal directly with the third party who is claiming that you were negligent. Your insurer will pay all costs and expenses associated with defending and or settling the claim on your behalf, leaving you free to concentrate on running your business. You will normally only have to pay the policy excess.

Find out more about:

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