Your Heavy Equipment Insurance Guide

Your Heavy Equipment Insurance Guide

Posted by Danielle Beserra on 2 July 2020

Tags: kubota, heavy equipment, rental, insurance

 When purchasing new heavy equipment the last thing you want to worry about theft or damage. Ensuring your equipment gives you peace of mind while protecting you from a devastating loss. If you are still contemplating equipment insurance, ask yourself whether you can afford to replace or repair stolen or damaged equipment with your own money. 

If you are planning to finance your equipment, insurance will likely be required. Without insurance, most lenders won't be willing to loan you money unless they know their assets are safe. 

Obtaining adequate coverage can be time-consuming and seem overwhelming, but diligence in selecting an insurance provider and obtaining the most comprehensive coverage is the smartest decision when protecting your bottom line.

Research 

When choosing a policy for your piece of equipment or fleet, you must do your research. Inquire about policies from various insurance companies and read their documents to better understand what is covered and what option best applies to you and your equipment needs. Policies also differ if you are using your equipment for farm or construction purposes, so double-check if it covers the intended purpose of the machine.

Risks: 

Once your equipment leaves the dealership it is up against many natural disasters such as monsoons, hurricanes, wildfires, and more. A very common issue that we see is rodent infestation, leaving equipment damaged, and in need of costly repairs. When it comes to protecting from natural disasters, choose the policy that covers common natural disasters in your area. 

Apart from natural disasters, your equipment is also at risk for operator damage and theft. Travelers insurance noted: 

• Construction companies are losing over a billion dollars annually to theft and vandalism1
• 33% of contractors’ equipment losses are due to a collision.2 
• There were 103 weather events, each with damages in the billions from 2000 to 2014.3

Coverage 

The ideal coverage will allow you to replace a damaged part or stolen machine at no cost, or with a small deductible. Most insurance policies cover both operating risk and third-party liability.

Operating risks usually involve any external damage like fire, lightning strike, theft, or other damage that occurs while the equipment is being operated.

Most insurance is "actual cash value". Simply put, if a machine has to be replaced, the customer is given the value of the machine, the same as if he sold it for cash. There is nothing wrong with this type of insurance, but it offers you considerably less than you paid for your machine.

Although we recommend doing your own research and choosing the plan that fits your needs, KTAC offers a very comprehensive insurance plan for Kubota Equipment owners. With KTAC, when you buy a new machine and finance it with KTAC premium on a contract, and there is a need for replacement in the first five years, they will pay the Actual Cash Value + the replacement difference for a new machine (up to original sale price + taxes and fees). This means they will give you what you paid for versus what the machine is currently worth. Learn more here: KTAC-Coverage.pdf.