Loan and Hire Insurance For Motor Traders
Cover designed specifically for Motor Traders
Loan & Hire Insurance for motor traders
Being able to loan a courtesy vehicle to a customer can be a great advantage, not only to them but to your business, it enables your customer to go about their daily business whilst you have their car for repair.
But how does Loan Car Insurance work, is it really the best thing for your business to lend one of your vehicles to your customer, and what are the consequences if you do?
How does Loan and Hire insurance work?
Loan and Hire insurance is usually attached to the Road Risks section of a motor trade insurance policy, either a standalone Road Risk or where Road Risks insurance is part of a motor trade combined policy.
The policy covers the Trader’s vehicle whilst the customer is driving it, the important thing with this type of policy is that the vehicle is only covered whilst you have your customer’s vehicle in your possession for repair. So in the event of an incident, it is highly likely that your insurer would ask for proof your customer’s vehicle was there to be repaired, this might include proof that you have the parts ordered or that the parts have or are being fitted to the vehicle.
What loan car, or courtesy car insurance as it is often referred to, isn’t designed for is that the policyholder or garage owner to allow just anyone to drive the vehicle for any use, so no lending a vehicle for days out for your mates family at the seaside if their vehicle isn’t with you for repair.
Does loan car insurance provide cover for anyone?
Usually yes unless there are restrictions imposed by the insurer, they may restrict the age of the driver, your policy will explain what is and what isn’t covered.
Does it provide full cover
The policy provides the same cover as the rest of the policy, so if you have comprehensive insurance then the cover for the loan car will be the same.
The cover is usually available to add to your policy in two ways, full cover, or contingency.
This allows you to choose how your vehicle is protected, let us explain.
The full cover protects the vehicle fully, it follows the same cover as if it was the policyholder driving the vehicle fully comprehensive for instance. Subject to any policy restrictions you can lend your vehicle to any customer you wish.
Contingency Loan Car cover on the other hand is exactly that, it’s expected that your customer will cover the loan car themselves by adding it to their insurance policy. The contingency protects you the policyholder in case their insurance fails. There is however a but to this which many might think is not worth the hassle involved
Insurers offering this cover will want you to gather all types of information, things like photographic evidence as to who they are, copy licenses, proof of home address such as utility bills, proof that the customers motor insurance is providing cover for your vehicle, these are just some of the requirements.
How much does Loan & Hire Insurance Cost?
This is, unfortunately, one of those questions that are not easily answered, it depends on many factors, how the policy is currently insured, and the various factors that go into putting that together. Things such as location, current no claims discount, the type of vehicle or vehicles being used, and of course how many loan vehicles you have or plan to lend to customers play a part in the end figure.
Can I buy Loan and Hire insurance as a stand-alone policy?
A Loan & Hire insurance policy generally isn’t available on its own. When a customer borrows or loans a vehicle they are doing so as an extension to your Road Risks policy.
Loan & Hire is not Self Drive Hire
Sometimes there can be some confusion about the word Loan and hire, this is not Self Drive Hire. Whether you charge your customer an administration charge is entirely up to you, however, don’t forget that you can only provide the loan car if you have your customer’s vehicle for service or repair, as an example, it may require engine work or bodywork following accident damage.
Are there any disadvantages to having cover in place?
Of course, life is never simple, on a plus side it gives your business an advantage, your customer can drive the loan vehicle whilst their vehicle is with the garage for repair.
The downside, if the customer bends the vehicle, as an example they are involved in a fault accident with a third party then it’s the garage’s no claims discount at risk.
Add to this any policy excess that you as the garage owner may have paid in the event of an accident.
Why choose Real insurance for your Loan and Hire insurance?
Real Insurance Group is a specialist broker to the trade sector, we are not a call center we provide expert advice and deal with most of the UK’s leading trade insurers. We provide insurance for the sector where the garage trades from premises.
Speak to us about your Loan & Hire Insurance requirements and whether it’s something that can work for your business.
