Tractor insurance

[MinnesotaEric]

Follow-up.

I've literally been shopping for commercial insurance since before I purchased my new Kioti. I believe I've called and followed up with every name (except Kubota only) mentioned in this thread.

Insurance should not be this hard: if for no other reason because customers give their money up front.

At any-rate, I've been expecting to pay somewhere in the neighborhood of $1000-1400 for commercial insurance to cover my Kioti as well as commercial liability for a start-up, part-time, little, side business. Commercial liability is the big concern as Minnesota is over-regulated. I have no idea why commercial insurance is a hard thing to get.

Anyway, an agent I've been working with based out of Bemidji just quoted me $2040 plus taxes and fees like he is doing me a favor. I picked up my jaw and I sent the following email:

You're killing me, Jeff.

$1000 annual was cool, but $2040 plus taxes and mystery fees?

I know I can cover the equipment with no liability for a little less than $500.00 annually.

In other words, I'm being asked to pay an additional $1500 to try to earn an extra $5,000, or 50 hours of billable time in my first year, which has a machine cost of $27.00 per hour plus the insurance cost of $1500 aggregated at $30.00 an hour which is more than the equipment itself costs to operate!

But worse, because I am starting out with zero business, in all likelihood, I will need to discount my first few jobs in order to develop a reputation and advertising will cut into any profits as well. Moreover, this doesn't cover the cost of truck, trailer, and transport cost.

There is a deal we can strike, but for this to work for me, I need the underwriter to realistically accommodate the hours I expect to bill and come down in price.​

 

[daugen]

Eric, does your Kioti have a backhoe and are you doing excavation work? Just trying to figure out how they rated your policy. (I am a retired insurance agent...)
Commercial policies always started around $500 for low hazard stuff, no carpentry, plumbing, digging. Once you get above the low hazard classes, if you get into any kind of demolition and particularly excavation/digging, it does not surprise me that they will charge you 2K for a backhoe. You are brand new and unknown to an insurer. You many not have any other business with that insurer. If you hit something or injure something, that $2K premium will get used up in a nanosecond, and they know it, so until they insure you for awhile, or until you have been in business usually three years, or you can prove prior experience, they will charge more to cover any unknown exposure. And on a new client, everything is pretty much unknown...
This is where a good local agent with some pull with his insurers would help.

when you are rated for liability it is usually done by gross billable receipts and maybe some payroll. There are always minimum charges regardless. Maybe you are running into those minimums, which only shopping around will confirm.



If you were doing field mowing, this pricing would be ridiculous. General liability is based on the hazard of the class, so it really depends upon what you are doing with your tractor.

 

[MinnesotaEric]

Eric, does your Kioti have a backhoe and are you doing excavation work? Just trying to figure out how they rated your policy. (I am a retired insurance agent...)
Commercial policies always started around $500 for low hazard stuff, no carpentry, plumbing, digging. Once you get above the low hazard classes, if you get into any kind of demolition and particularly excavation/digging, it does not surprise me that they will charge you 2K for a backhoe. You are brand new and unknown to an insurer. You many not have any other business with that insurer. If you hit something or injure something, that $2K premium will get used up in a nanosecond, and they know it, so until they insure you for awhile, or until you have been in business usually three years, or you can prove prior experience, they will charge more to cover any unknown exposure. And on a new client, everything is pretty much unknown...
This is where a good local agent with some pull with his insurers would help.

when you are rated for liability it is usually done by gross billable receipts and maybe some payroll. There are always minimum charges regardless. Maybe you are running into those minimums, which only shopping around will confirm.



If you were doing field mowing, this pricing would be ridiculous. General liability is based on the hazard of the class, so it really depends upon what you are doing with your tractor.

I have no backhoe and plan to do no excavation work. Box blade, land rake, grapple, rotary cutter, bucket with tooth bar are my implements. I want to be able to do landscaping, leveling field mowing and what not.

 

[daugen]

Eric,
I reread your post. Taxes and mystery fees? That is not standard insurance likely, that is underwritten by a nonadmitted carrier, usually offshore, and the taxes and fees are being charged due to that. So maybe your guy just does not have a standard market and is putting you in the proverbial assigned risk until you get some experience?
In other words, is it you, or is it his lack of alternative carriers?
Your credit rating and driver record also have some effect, though not insinuating anything here; just a reality today. Drew

I'd say a grand for your liability makes sense. Maybe they have too many folks up your way pushing snow with tractors and hitting things that might factor into it.
Not you...but you get lumped in with everyone else.

 

[MinnesotaEric]

Eric,
I reread your post. Taxes and mystery fees? That is not standard insurance likely, that is underwritten by a nonadmitted carrier, usually offshore, and the taxes and fees are being charged due to that. So maybe your guy just does not have a standard market and is putting you in the proverbial assigned risk until you get some experience?
In other words, is it you, or is it his lack of alternative carriers?
Your credit rating and driver record also have some effect, though not insinuating anything here; just a reality today. Drew

I'd say a grand for your liability makes sense. Maybe they have too many folks up your way pushing snow with tractors and hitting things that might factor into it.
Not you...but you get lumped in with everyone else.

I have a clean driving record, and my credit rating ranges from about 810-830. I believe you when you think that nobody wants to cover me, because apparently, they don't.

 

[k0ua]

I have a clean driving record, and my credit rating ranges from about 810-830. I believe you when you think that nobody wants to cover me, because apparently, they don't.

Did you ask Kubota Insurance (KTAC) and see what they had to say? Keep in mind they are an advertiser and contributor on this forum.

 

[MinnesotaEric]

Did you ask Kubota Insurance (KTAC) and see what they had to say?

That's like calling out the wrong woman's name.

Baby, would you insure my Kioti?

 

[k0ua]

That's like calling out the wrong woman's name.

Baby, would you insure my Kioti?

They have the insurance on mine. but then again I try to be careful what I scream out!

 

[MinnesotaEric]

They have the insurance on mine. but then again I try to be careful what I scream out!

In that case, I will give them a call….

Baby, this is Kubota. You don't mind if she helps, do you?

In all seriousness, is your dealer a Kioti/Kubota dealer?

 

[k0ua]

In that case, I will give them a call….

Baby, this is Kubota. You don't mind if she helps, do you?

Worst they can do is say no. I spoke to some lady over there, and she wasn't hard to get along with, Now it may be because I was a former Kubota customer, and had insurance with them before, but she said If I would get the serial numbers of the tractor and the loader and the total price paid to them they would write a policy and they did.