Following the outbreak of COVID-19, the public is being urged to self-isolate, which has resulted in the motor trade industry seeing large reductions in the amount of work available to them.
We have had many motor traders contact us to enquire if and how exactly they can go about stopping their insurance policy payments, and if it is a case of cancelling or suspending the policy to help reduce their monthly outgoings.
Think Twice Before Cancelling Your Insurance
At first, this may seem like a logical way to act. However, doing so could cause problems. Here are some of the issues you could encounter over the next few months…
Problems with Cancelling
Are your vehicles going to be remain taxed?
All vehicles which have Road Tax must be insured at all times. Failure to do so could result in fines, court prosecutions or ultimately your vehicles being destroyed. There are some exemptions, to find out more you can view the government website.
Do you still need access to your vehicles?
For many, you may use your vehicles for your personal life as well as business. Therefore, cancelling your insurance will prevent you from using it for either. This could prevent you from making essential or emergency journeys.
Where do you keep your vehicles?
Are any of your vehicles kept on a public road? Then the law states your vehicles must be insured at all times. To find out more you can visit the governments’ website to read more about this.
Additionally, are your vehicles secure where they are parked? Should any of your vehicles be stolen or damaged whilst they are parked, it could leave you further out of pocket if they are not insured.
Can you cancel your insurance?
Do you have any vehicles on a lease or a type of purchase agreement, then your lender may state the vehicle must be insured at all times. Therefore, cancelling your insurance could leave you in breach of your agreement.
Additionally, if you have made a claim from your policy within the current policy year, and the claim is not reimbursed, then you will not be entitled to any return of your premium.
Are there solutions or alternatives
We are working hard with our insurer partners and finance providers to try and find solutions. However, we hope you can understand we are in unprecedented times. Everyone is trying to do what they can and things are changing daily.
Our Insurance Partners
Our insurance partners are looking into what assistance they can offer and what options can be made available.
They can not give you free insurance as they need the premiums to pay claims and cover their own cost. However, they are looking into how they can offer clients a mid-term return for downgrading the level of your cover you may currently have.
We will provide more information on this as it unfolds over the next few days and weeks.
If you pay your insurance via a monthly direct debit, this will be via a company called Premium Credit.
Unfortunately, unlike a loan repayment for a car or your mortgage which is attached to an asset, this credit agreement is for your insurance which is not an asset, which makes it difficult to extend payment terms or allow breaks.
Premium Credit has advised anyone struggling to make payments towards their credit agreement, should contact them, and each case will be assessed. You can contact Premium Credit on the following number 0344 736 9836
To Be Continued
As mentioned we are in unprecedented times and the landscape is changing daily. We would, therefore, recommend you follow us on Twitter, Facebook or LinkedIn, and ensure you are subscribed to our newsletters to keep up to date with our news during these challenging times.
If you require more information regarding this topic you can contact our expert Motor Trade Insurance team via email… MotorTradeCustomerServices@planinsurance.co.uk