If you own a private vehicle, then you’re probably already well-acquainted with what it takes to get insured. After all, vehicle coverage is mandated for all vehicles out there on the road without exception.
However, those who own a-typical vehicles as well as those who drive as a part of their occupation (and this means more than your daily commute) have additional considerations to take into account when it comes to choosing coverage.
In this post, we’re going to explore some of the key factors that are taken into account when an insurer sets the premiums for specialist car insurance policies. Most of these factors are relatively straightforward; however, it is still helpful to see them laid out in clear and concise language.
But before we proceed with specialist coverage, let’s take a moment to consider the factors that affect all vehicle insurance policies—whether intended for private, commercial or public use:
• Age of the driver – Statistics don’t lie, and there are plenty to suggest that younger drivers are more prone to taking chances. For that reason, most insurers charge higher premiums if the driver is under the age of 25.
• Gender of the driver – Some will cry foul of discrimination, but statistics suggest that women drivers are involved in fewer accidents than their male counterparts (note: the gender gap is narrowing of late).
• Annual mileage – this is another matter of simple statistics; every minute that you spend out there on the road is a minute that you are exposed to risk; the more you drive, the higher your premiums.
• Occupation – insurance companies have found that certain occupations involve higher levels of stress and (presumably) lead to less-safe driving practices. Algorithms are complex in this case, but suffice it to say that people with certain occupations pay higher premiums than others.
So What about Specialist Vehicles?
We’ve covered the standard requirements; now let’s look at how premiums are calculated in specialist circumstances. First of all, those who work in an industry that requires them to routinely drive a vehicle must be covered by specialist motor trade insurance. Taxi drivers, freight drivers and deliver persons may come to mind, but that’s actually not what we’re talking about. Instead, we’re looking at those who run businesses that involve cars in any way at all. For example, the following businesses would all be grouped in this category:
• Car garages
• MOT centres
• Valet services
• Vehicle dealerships
In each of these situations, those on the policy spend significant time behind the wheel despite the fact that they are not picking up passengers or delivering goods. In particular, this coverage must protect against damage to property (i.e. vehicles) owned by the motor trader, as well as any liability exposure involving other people’s vehicles.
Here are some of the factors that come into play:
• Types of vehicles involved in the trade – obviously, larger and more expensive vehicles are going to cost more to insure.
• Business location – busier districts include more and greater risks as well as greater exposure to liability.
• Nature of business – do you work for a dealership that requires you to drive vehicles back and forth between locations? If so, you may encounter higher premiums than, say, a mechanic who simply takes a car for a spin around the block to make sure it’s in working order.
• Addition of private vehicles – it is often possible to add private vehicles onto a policy of this nature; of course, this will result in higher premiums.
• Number of drivers covered – we mentioned this one above in the general section, but it’s worth noting how it applies to the motor trade as well. The premium will depend on whether the vehicle in question is covered for one driver only, multiple named drivers or anyone who gets behind the wheel.
As you can see, a variety of factors go into determining premiums in specialist situations like this. If you would like to learn more, the best way to proceed is to contact your preferred insurer to see how these (and potentially other) factors apply to your situation.