But what traders may not realise is that the change in value of everything from building materials to car parts is having an impact on their insurance – leaving many motor trade businesses underinsured.
Why motor traders must check their cover
It’s down to the garage owner to let their insurer know the correct valuation of the premises listed on their insurance policy, as well as the value of the stock and tools they have on site. This enables the insurance provider to supply sufficient funds to reinstate the garage and stock if they get destroyed or badly damaged, for example due to a flood, fire or other disaster.
However, due to the ongoing impact of the pandemic and supply chain issues across Europe, the cost of building materials here in the UK has risen sharply – meaning it costs a lot more to rebuild a property today than it did just a year ago. Add to that the risk of underestimating the value of stock, whether accidentally or in the hope of a reduced premium, and motor traders could end up with significantly less
insurance than they need. In the event of a claim, this could cost them hugely.
The financial risks
Underinsurance is a national problem for all sorts of businesses owners. Figures show that more than 80% of buildings insured in the UK are under-insured – leaving the claimant financially exposed. But there’s another risk too.
If the limit on a motor trade policy is set too low, it could result in a proportionately reduced claim pay-out – leaving the garage owner with the responsibility of funding the remaining costs. This could cause serious issues with the business’ ability to operate, which is why it’s so important for motor traders to check their cover limits are aligned with the actual stock they have on site, as well as current building costs.
The best way to achieve this is through a proper audit of your stock and a professional valuation of your buildings – especially if one has not been carried out within the last year.
Support is at hand
It can be all too easy to end up under-insured without realising it. But motor traders can find support from a number of organisations with longstanding experience in the motor trade industry.
Aston Lark Motor Trade is one of the UK’s largest independent brokers and trusted by over 19,000 traders nationwide. Offering a broad variety of cover, Aston Lark’s Motor Trade team put ease at the heart of their service – combining specialist knowledge with a helpful attitude to find motor traders the right cover for their individual needs.
From independent motor trade professionals to franchise dealers, recovery operators, auction houses and more, Aston Lark tailors cover to each motor trader they look after and offers extra protection as standard, like £1m vehicle stock cover and enhanced commuting cover.
What’s more, they work in conjunction with Road Runner – the original motor trade insurance specialists. Providers of independent and commercial motor trade cover for over 25 years, Road Runner offers a wide range of services, backed up by a handy online client portal to make life easier for motor traders. From roadside rescue to workshop repairs and second-hand sales, Road Runner understands all the moving parts of the motor trade and they tune their cover to the specific needs of every customer.
Together, Aston Lark Motor Trade and Road Runner can help make sure motor traders have the right level of cover to ensure no customer gets caught out by underinsurance.
A next level partnership
To support independent motor traders further, Aston Lark also partners with the Independent Motor Dealers Association (IMDA). As the association seeks to offer guidance, support and a much-needed voice for the industry, Aston Lark has offered a helping hand at every opportunity – from sponsoring events, to training days and industry meet-ups, to examining ways to better protect independent traders.
With their mutual understanding of the pressures independent motor traders can face, the IMDA and Aston Lark have worked together to establish an exclusive insurance offering for members – with benefits ranging from an automatic £1m uplift, to £10,000 worth of cover for machinery, plant, fixtures and fittings for free, to the option to lock in pricing for up to three years to ease cashflow.
Check your cover today
The ultimate aim of the partnership between IMDA and Aston Lark is to give peace of mind to independent motor traders – but the present risk of underinsurance needs to be addressed.
For all motor traders operating from a premises, whether a garage, dealership or yard, it’s important to book in a professional valuation for your buildings, assess the value of your stock and double check your policy limits are correct.
If you need help or guidance, both the Aston Lark Motor Trade and Road Runner teams are on hand to help. Simply visit www.astonlark.com/autoscene to find out more.
Statistics from chartered surveyor Barrett Corp & Harrington (BCH) based on client statistics