A motor trade insurance policy from reputable motor trade insurers is an essential tool for many car dealers, mechanics and recovery operators whether you are part-time or full-time. The policy allows you to drive any vehicle in your possession for motor trade purposes and to add your own vehicles directly to the Motor Insurance Database (MID).

Unfortunately, this ability to access the MID is often exploited by Organised Criminal Gangs who obtain insurance by fraudulent means. They aim to add illegitimate vehicles to the MID in an attempt to evade the Police and their Automatic Number Plate Recognition (ANPR) cameras to carry out illegal activities.

Insurance companies have many tools at their disposal to identify and avoid fraudulent policies but these will not always stop every dishonest application and therefore insurers will perform regular audits on their motor trade policyholders.

It is essential that you keep good records including purchase and sale receipts, copy invoices of work completed, and up-to-date V5c documents. Whilst this may seem like a burden, it is of course good business practice and also helps prevent fraud and keep premiums lower (it is no surprise that those who commit insurance fraud also have high claims frequencies which ultimately results in higher premiums for everyone).

Motor trade policies usually make it a condition of the policy that you retain and can supply upon request, formal business records demonstrating the operation of a motor trade business. Failure to satisfy this request can lead to your policy being cancelled or voided from inception.

Here at Lifestyle, we have dedicated customer service agents to guide you through this process whenever the need arises. If you have any questions about this topic, please feel free to contact us.