The Difference Between a Combined and Road Risk Only Motor Insurance Policy

In the UK, motor insurance coverage is a mandatory prerequisite for anyone looking to head out onto the road. For motor trade business owners, with more complex needs than most road users, there’s motor trade insurance.

An Introduction to Combined and Road Risk Only Policies

In the UK, motor insurance coverage is a mandatory prerequisite for anyone looking to head out onto the road. For motor trade business owners, with more complex needs than most road users, there’s motor trade insurance.

Motor trade insurance comes in two main types: Combined Motor Insurance Policies, and Road Risk Only Motor Insurance Policies.

As a leading provider of both combined and road risk only policies, we’re here to help you decide which type of cover is right for you and your business.

What is a Combined Motor Insurance Policy?

A combined motor insurance policy can be tailored to cover you for any eventuality. These extensive policies provide, above all, peace of mind.

With a combined policy, your business is protected in its entirety, including all stock and operations. You can even be protected against third-party claims for any injury or damage caused by your business, as well as loss of income, any claims made against you as the business owner, costs associated with safety assessments of your equipment, the loss of your ability to issue MOTs, and any claims made in relation to parts fitting or vehicle and product sales.

Typically, combined policies are suitable for:

  • MOT stations
  • New and used car sales operations
  • Dealerships
  • Auto electricians
  • Service and repair garages
  • Any motor trade business with stock or premises to protect
  • Recovery operators
  • Body shops
  • Classic car restorers

The Benefits of a Combined Motor Insurance Policy

With a combined motor insurance policy, your business, and your most prized assets, are protected no matter what comes your way. If the last few years have taught us anything, it’s that everything can change overnight.

Because it’s impossible to predict what might affect your business, many owners opt for the most complete coverage available to ensure they’re not out of pocket if the unexpected should occur.

As well as complete coverage, you’ll also benefit from having just one policy to cover all your needs, which means no more juggling different policies and providers. This simplicity also often provides additional cost-effectiveness.

What is a Road Risk Only Motor Insurance Policy?

For those looking for the baseline of coverage, road risk only motor insurance can be a handy alternative.

These policies are the bare minimum that your motor trade business needs to legally operate on the UK’s roads. They will protect any vehicles involved in your operations, including those being sold, prepared for sale or delivery, and those being delivered to clients.

Much like standard motor insurance, Road Risk Only motor trade insurance is divided into three main brackets:

  • Third Party Only – Third party insurance is the minimum legal requirement to drive a vehicle on the road and covers any costs you might incur should a vehicle in your care cause damage to someone else’s property. It won’t, however, cover the cost of damage to your own vehicle should you be involved in an accident where you’re at fault or where there’s no third party to claim from.
  • Third Party, Fire and Theft (TPFT) – One step above Third Party Only policies, TPFT policies provide additional cover against costs associated with fire damage or theft of vehicles under your care. A TPFT policy still won’t offer any cover against accidents where you’re at fault or where there’s no third party to claim against.
  • Comprehensive cover – Comprehensive policies are often the go-to option, as they offer complete protection for your vehicle. They offer all the protections of a TPFT policy but also cover the cost of your vehicle even if you’re involved in an accident where you’re at fault.

Our cover options are completely flexible, and you can tailor your cover to match your needs with a number of policy extensions including test drive cover, windscreen cover, vehicle transit cover, trailer cover, protection for your no claims bonus, and cover for vehicle stock while in storage.

Is a Road Risk Only Motor Insurance Policy Right for me?

All motor trade businesses need road risk insurance, and the level of cover you feel you need is up to you, but there are a few types of businesses that tend to benefit most from Road Risk Only policies:

  • Mechanics and mobile mechanics
  • Vehicle valeters & detailers
  • Vehicle panel beaters & body repairers
  • Auto electricians
  • Auto locksmiths
  • Vehicle sales from Home
  • And new businesses who will often find it difficult to obtain a Combined Policy in year 1.

Combined Vs. Road Risk Only Motor Trade Insurance Policies

There are a few key differences between combined and road risk only motor trade policies, including levels of coverage, price, and how suitable they might be for different kinds of businesses.

Combined policies offer a much higher level of coverage than road risk only policies and could often be regarded as the gold standard in motor trade insurance policies as they will protect much more than just your vehicles.

However, with this increased scope of coverage comes a higher level of cost that might rule out these policies for some scales of operations or individuals.

Combined policies are often more suitable for larger or more complex operations that hold a lot of valuable equipment, facilities or large volumes of stock.

How Much Do Combined and Road Risk Only Policies Cost?

Because there’s a difference in the level of coverage offered by combined policies and road risk only policies, there is also a price difference.

Combined policies cover all your needs, making sure you’re protected no matter what. This means they come with a higher price tag than road risk only policies. However, this is just one cost, rather than many, to consider and can be more economical on a large scale.

Road risk only policies are more limited in their protections, and therefore offer a more accessible price point and can be an effective cost-saving tool if they meet all your needs.

What do Combined and Road Risk Policies Cover?

Combined motor trade insurance are quite extensive in their coverage and can be scaled to suit any business and cover a huge range of assets and unforeseen circumstances. They are designed to protect your business as a whole, rather than just specific vehicles or stock.

Combined policies offer the same cover as road risk policies, but also cover you in a variety of other potentially costly situations. These include public liability cover, loss of income, in the case of any claims made against you as a business owner, cover for engineering inspection costs, sales and service indemnity protection, and cover in the case of loss of MOT licence.

Road risk only policies are limited to covering set assets and aspects of your business, such as a work van or tools. These policies offer the base level of protection you need to operate a motor trade business in the UK. They will not offer the same whole-business level of coverage but can be more flexible and affordable.

Which Kind of Policy is Right for me?

Which policy will suit your business best will depend on your needs. The two main types, combined and road risk only, are designed to suit different situations, with various levels of coverage within each meaning there’s a policy to suit you no matter your requirements.

What Factors Should I Consider?

You should consider the potential impact on your business and income in the case that something goes awry.

For larger businesses with lots of assets to protect and more opportunities for unexpected setbacks, combined a combined policy is likely the right solution. These policies can cover your whole business in a huge range of situations and protect you from loss of earnings in even the most unexpected circumstances.

For many individual traders or smaller operations with lower-value assets and equipment, road risk only policies could be the right way to keep costs low while still ensuring that you’re protected.

The Right Policy for You

Ultimately, only you can decide which insurance policy is right for you based on your business’ size, value, and the potential risks involved.

Our expert team can help discuss your needs and the right policy for your business, and tailor your coverage to your individual needs.

Speak to us today to find the right motor trade insurance for you.

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