Wrongful Conversion
As a motor trader, have you ever stopped to think what would happen if you bought a vehicle to sell that you or the new owner later found out neither of you has title to?
If you buy and sell vehicles of any kind, you could become a victim of this. You might have been through the usual checks such as HPI or similar, which was clear, but time has moved on. You find someone knocking on your door saying the vehicle you have on your sales pitch is theirs and they want it back, what then?
This is when the arguments start, who is the rightful owner?. You bought the vehicle in all good faith but the person knocking on your door is the original owner. If the original owner has been paid out by their insurer then it could be they that have the rightful claim on the vehicles title, yes what a mess.
The vehicle turns out to be stolen. What then?
So, you’ve passed the argument stage, but what next. If you have Wrongful Conversion insurance cover on your motor trade policy, you should be insured for your financial loss.
As this type of cover is usually a policy option, you could already have the cover in place. It’s rarely a standard insurance cover on a motor trade policy though. If you don’t have Wrongful Conversion, you need to speak to your broker, or, if you wish, motor trade insurance experts like us at Real Insurance.
What does wrongful Conversion insurance cover?
Suppose a vehicle you have purchased turns out to be stolen for instance. In that case, if the rightful owner can substantiate a valid claim that the title to the vehicle is indeed theirs either require the vehicle to be returned or payment made to its value; wrongful conversion will provide cover up to the limit on the policy.
Cover will be subject to you having checked with the appropriate agencies when buying the vehicle that it was clear. It would usually be a condition of the policy that all payments for the car purchased were by BACS, Card, Cheque and similar.
Any payment made to you will usually be less a percentage which will be written in your schedule.
Does wrongful conversion insurance have an excess?
Actually, not precisely an excess, but there would usually be an amount of the overall claim you would have to pay. Depending on your insurer, this would usually be something like 20% of the claim.
Is Wrongful conversion insurance expensive?
In the grand scale of things, no, but it depends on several factors when the insurance is taken out. Of course, the higher the protection you require per vehicle per claim, referred to as an indemnity limit, will be considered. Suppose you are dealing in high-performance or prestige vehicles. In that case, you are going to be paying more premium than if you are selling low-value cars.
Likewise, the higher your turnover, the higher the premium; after all, if you are selling more vehicles, you will have a higher risk.
Can I buy Wrongful conversion insurance on its own?
This type of insurance would usually be purchased as an optional cover on a Motor Trade Combined insurance policy.
