Why an A-Rated insurance company is the best choice for your business

With motor trade policy prices still on the up, it’s understandable that many clients are shopping around for a lower quote. Something’s got to give, right? Well, no, actually – there certainly shouldn’t be any compromising on the standards and coverage of your insurance. There may well be cheaper options out there, but these are often from unrated insurers or markets who may suddenly pull out of the market as quickly as they entered, leaving customers, high, dry, and back to square one. In this article, Road Runner (who have been allied with A-rated AXA since 2013) explains exactly why you need to partner with an ‘A’ rated and experienced insurance provider, how to negotiate a decent and fair quote, and what you need in order to earn that ‘A’ rating.

What is an A-rated insurer and why do you need one?

First thing first; an A-rated insurer has got the full approval from the Chartered Trading Standards Institute (CTSI). It will also have received a high credit rating from one of the leading agencies, such as Moody’s AM Best, or Fitch. Having this accreditation means that they will have a reputation for having a strong and secure financial footing, they’re likely to honour policy terms and repay creditors.

At a more granular level, critical elements that determine the rating of an insurance company are likely to encompass financial reserves, business focus, claims payment history, and even style and structure of management and leadership.

Ratings actually go from the highest AAA down to C, but anything with an A status is one that you can feel confident in.

What could happen if you don’t use an A-rated insurer?

The answer to why you need one lies within the above – why would you put your faith and insurance needs in the hands of an organisation that doesn’t fulfil this criteria? And this is often the case with newcomers to the market who are likely to have a lower rate; they haven’t built a solid foundation, financial reserves may raise questions, and their credit history might also raise eyebrows.

For customers, the impact is that if their insurance provider were to crash and burn, they would be without cover and unprotected. And that cheaper insurance premium that seemed like a sound idea at the time…? It’s likely to cost you more in the long run. That premium outlay would be lost, you’d need to negotiate a whole new policy with another provider, and that seemingly savvy saving may end up leaving a hole in your profit margins.

Here’s a short example of when bright, young things go dark. At the start of the century there was a new player called Independent Insurance headed by Michael Bright. His business and erm, “bright” personality attracted around 500, 000 customers from the London Fire Brigade, to the Oval Cricket Ground, the McLaren Formula 1 Racing Team and even Somerfield supermarkets (Remember them? We thought not).  Then the blaze of glory imploded into a dark trail of disgrace, debt, and dissatisfied customers as Independent Insurance collapsed. Jobs were lost – and not just at the insurance company itself – and shareholders looked into a deep and empty hole where their formally healthy investment portfolios sat.

While the above may sound a little high-end and dramatic for many motor trade businesses, it should nevertheless serve as a stark warning when considering your insurance provider.

What should you consider when choosing an insurer?

We’ll pull out a top trio of factors to think about for this one – stability, reputation, and longevity in the market.

It may sound an extra level of bother but do your research. That A-rate is important, but what has the insurance provider done to achieve that? Make sure at the very least that they’re authorised by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). These bodies verify that both old-timers and newcomers are meeting tough requirements and have no history of misleading customers.

You can check here on the FCA’s financial services register if they are regulated. If not, move on to the next possible choice.

Once you have a list of contenders, look at their websites and a review site such as Feefo (Road Runner is currently scoring 4.8 out of 5 on there based on 598 customer reviews) to not only see what the insurance company is saying about its history and partnerships, but what customer’s themselves have experienced – especially if they’ve had to make a claim.

How do you secure the best quote?

As a part of the motor trade, your insurance cover requirements will be very different to that of a builder, café, or suite of offices, so being clear on what you do and what equipment you work with is key to making sure you get a fair quote and you don’t leave yourself and your business underinsured.

Make sure that ahead of any conversations or online quote requests you have a comprehensive list of all your tools and machinery, can specify where you keep any vehicles, and can also talk through security systems, current indemnity, and liability limits, who are your named drivers and what policies they may hold for MID purposes, and of course, what your claims history is. Declare everything, and that way there can be no issues with the agreed quote.

And finally … partner with a motor trade insurance expert

This is where working with a specialist and experienced insurance broker such as Road Runner really comes in handy. With more than twenty-five years of building customer relationships across all parts of the motor trade – from mechanics to vehicle sales, and panel-beaters to paint experts – we come with the stability, reputation, longevity, as well as a ton of knowledge to help you secure the best quote, and right insurance for you. And we make it our business to work with A-Rated AXA, so your business remains in safe hands.

Our parting advice? Opting for an insurance A-lister may not be the cheapest insurance option, but it is the most reliable and sensible. After all, none of us want to be caught out by that old saying: “’Buy cheap, buy twice”.

If you want to know more about the advantages of A-Rated insurance and would like to find out how Road Runner can benefit your motor trade business, call us on 0330 100 8720 Or come here to get a quote today.