Applying For Motor Trade Insurance: How Much Does Your Financial Past Matter?

If you're a motor trader, the right insurance policy is essential in protecting your business operations and your reputation. Whether you need road risks insurance to protect your vehicles during transport or delivery, or a combined policy that also features protection for your business premises, the right policy makes all the difference.

If you are a sole trader and have a poor financial history, you may worry about your ability to find a good insurance policy. The kind that gives you the cover you need without impinging on your margins.

Let's set the record straight here.

Does My Personal Credit Matter For Motor Trade Policy Insurance?

The short answer is yes. But don't start worrying just yet.

Motor trade insurance companies are just like any other insurer. They make decisions based on risk and provide preferential rates to attract customers who represent less risk. But that doesn't mean that the insurance industry is averse to traders with bad credit.

Indeed, there are insurers out there who specialise in providing insurance to motor traders who have a less-than-stellar credit history and helping them actively rebuild their credit scores.

If you have financial issues like poor credit scores, past bankruptcy or a CCJ, these don't necessarily mean you have to abandon your dream career as a motor trader.

Will Motor Trade Insurance Companies Refuse Me If I Have Bad Credit?

Some very risk-averse insurance providers may refuse to cover you if you have bad credit. Still, even if this happens, you are likely to have at least some options.

Realistically, you're more likely to have fewer payment options or pay slightly higher premiums. This enables the provider to offset their risk while also allowing them to provide you with a service and secure themselves a customer.

Honesty Is Always The Best Policy

Bad credit, bankruptcy and CCJs are often linked to personal trauma and hardship. Some may feel embarrassed about their past debt. As such, it can be tempting for some to avoid mentioning their adverse credit history.

However, it's absolutely vital that you are upfront about your financial situation during the application process.

Insurers will carry out a credit check when you apply. This may be a soft credit check if you're paying annually or a hard credit check if you are paying monthly (as this is a form of credit).

Any adverse credit history will be laid bare here.

Even if you fail to omit your credit history and evade detection, it may invalidate any future claims you make, putting you and your business in a very tricky situation.

Bad Credit Doesn't Have To Mean Bad Insurance

Even if you have bad credit, insurance is still within your reach. You don't even have to settle for a bad policy.

Our team of experienced insurance brokers work with numerous motor trade insurance specialists, including bad credit insurance providers. We can help you find a policy that protects your business without decimating your profit margins.

Want to know more? Get in touch with us today!