See: Conversion. The wrongful conversion section of the motor trader’s policy covers the insured for: (a) the loss which occurs when a vehicle, purchased from a person who is not the true owner, is reclaimed by the true owner or to whom compensation has to be paid; and (b) loss following the sale of a vehicle in circumstances where the trader is unable to pass a valid title to the purchaser who may claim damages against the trader. The insurance is conditional upon the trader carrying out a check on possible hire purchase agreements that may be in force before parting with his cheque. The trader generally carries the first 20 per cent of any loss.