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A guide for Childminders - Choosing the Correct Motor Insurance
20/03/2019
MinibusLeasingUK is pleased to have insurance expert James McDonald, Personal Lines and Individual Childcare Manager at Morton Michel, one of the UK’s leading childcare insurance specialists, as a guest contributer.
James is offering his expert advice on choosing the correct motor insurance for the vehicle you use for your childminding business – his tips range from how to compare quotes online to the specific questions you should ask that relate to your business.
Thanks James!
Insurance, it’s a simple thing. So easy to understand…
I’m lying of course. These days buying insurance isn’t always a straightforward, stress free experience. The rise of comparison sites and the online quote and buy service has revolutionised the way we buy insurance. It puts the power of choice into the customers hand by providing a list, organised cheapest first, letting you, the customer, choose what you pay for.
The one (hidden) downside of buying insurance this way is that the burden of accuracy isn’t the insurers anymore. You, the customer, have to take total responsibility for what you purchase even if it wasn’t suitable.
Doesn’t seem fair does it?
However that’s the compromise, cheapest product available but no guarantee it’s the right one. I have worked in insurance for 12 years and have the luxury of understanding mileage restrictions, the difference between social domestic and pleasure with commuting and personal business use and why a £0 voluntary excess isn’t always a good thing. However, people that don’t have the benefit of dealing with this every day are making educated guesses about what is relevant to them.
When you then add in additional factors to consider, like the fact that your vehicle (or your home) is used for business, it really makes the whole process a minefield of assumptions and unanswered questions.
I would like to help make this process as easy as possible by giving you some tips to make sure when you buy your insurance you can be confident it meets your needs.
I’ve broken it down in to 3 tips and I’m starting with what might seem the most obvious:
If in doubt, call them– A number of times I have had customers tell me they will be changing to a new insurer at renewal, one they have found online. I ask them if they have told the company what their vehicle is used for and normally they will reply with something along the lines of, “I asked for business use and told them I am childminder” and I can completely understand why that makes perfect sense. The occupation has been disclosed quite clearly and the business cover has been requested, why would that not be right?
Firstly, the business use part, this doesn’t always mean that you will be covered to carry children in your vehicle and definitely won’t cover you if your customers are paying you extra (like a charge not covering mileage costs) to provide that service. Most insurers will assume that you will be travelling to more than one location to care for children and not that there will be the extra risk of children passengers in the vehicle.
To illustrate this point, when I was conducting some market research ahead of this article I phoned 3 separate insurance companies to see how they would cover this.
- One of them said that they would class the children as “business equipment” but that they wouldn’t have any personal injury cover.
- Another one told me they would treat the children as “employees” and would need them to be “properly insured elsewhere to travel”.
- The last company just flat out rejected the idea of covering a child who was being minded getting in the vehicle.
All of these quotes were initially found online and all companies were presented with the same information.
I would suggest that once you have found a suitable quote then call the insurance provider and explain the uniqueness of your requirements. That extra 5 minutes could be time well spent if you were ever in the unfortunate situation where you have to make a claim.
It’s in the small print – Now it’s a misnomer that insurers try and hide the ‘scary’ bits of information from you. The truth is there is just so much information that it’s hard to present it in a way that makes it appealing to read through. The trick is to know where to look to find out things that could be red flags.
With motor insurance these are some of the documents you should check and what to look for:
- Schedule – The schedule will show you endorsements applying to your policy, things like a mileage limit or a young driver excess. It will also list your excesses; the important bit is to find the total excess (the sum of the voluntary and compulsory excess combined) as that is the excess you are liable for in the event of a claim.
- IPID – This is a new document and was introduced at the back end of 2018 following an FCA regulation change. It breaks down the significant exclusions and gives you the outline of what the policy is designed to cover.
- Certificate – This is the bit that proves you’re insured and it contains some very important information. It will show the vehicle you have covered, it will list who is eligible to drive and then there is a section on there that causes quite a bit of confusion. I’m sure you will have heard of ‘driving other vehicles’ but the facts about this are not well known. Just because your policy is fully comprehensive you don’t definitely have this, the terms will be different from insurer to insurer so if you need this or want to know if you have look for this. Its normally in section 7!
- Policy Wording – This is the complete wording of your particular policy and I would suggest that all customers read this. This document will include all sorts of important information including, what to do if you have a claim. It will have a breakdown of all of the significant exclusions so if anything you need covered appears here then you will know the policy isn’t right for you. It also has a glossary telling you what all the insurance jargon actually means making it easier to navigate the documents.
The truth, the whole truth and nothing but the truth – If we are being honest, I’m sure we’ve all told a little white lie before. The thing is with insurance, those little white lies could be the difference between something being covered and not being covered correctly. I always advise clients that by making sure all cards are on the table from the very beginning means I can be sure the product I offer them is suitable for them and there won’t be any surprises if they ever did need to make a claim.
Make sure all claims you need to list have been added, all points and convictions are included and that if you don’t keep your vehicle in a garage you haven’t said that it is locked up safely in one every night. As a childcare professional this is exacerbated even more by the fact you’re responsible for the safety of passengers, which is something your insurer will want to know. So when you are filling in that online form make sure you’re putting everything on there.
So those are my 3 tips. They cover the basic pitfalls of buying motor insurance online and the things that most commonly can trip people up.
Here are a few specific questions related to your childminding business that you can ask to ensure you receive the correct level of cover required:
“What is the personal injury limit for my children passengers” – Some companies have no restriction on this but there are companies who impose limits on what you can claim for.
“Does my policy have a mileage restriction?” – Most quotes ask you to put in your ‘estimated annual mileage’ but what isn’t clear is if that then becomes a limit you have to stick to. This could be quite restrictive, especially if your business relationships change during the year and you have to travel more frequently or further.
“What additional products do you have available?” – Products such as car seat or pram cover are often not included in the main insurance policy but can be costly losses in the event of a claim.
“Does it matter if my business details are on the outside of my vehicle?” – Some companies class this as a modification. It’s always worth checking if the fact that your business is advertised on the vehicle is satisfactory.
“The vehicle isn’t just used to go to different places as I will be carrying children to and from different locations, is this ok?” – I saved the most obvious until last but it is definitely worth checking. It is something that is hard to get across when you’re filling in an online quote form, there isn’t a box for it!
I hope this has been helpful reading and if you do have any questions about motor insurance for childcare professionals feel free to contact myself or my team 020 3824 8475 or email us at motor@mortonmichel.com
James McDonald is the Personal Lines and Individual Childcare Manager at Morton Michel, one of the UK’s leading childcare insurance specialists. Find out more about their tailored motor insurance for childcarers and the additional benefits they offer at https://www.mortonmichel.com/Motor/