when to let go of tractor insurance

[Code54]

I do not post much anymore because I do not like to type, but there is misinformation here that I can just not let slide.

I owned an Erie Insurance agency for 22+ years, have sold it and retired 6 years ago.

For starters Erie has 3 levels of home policies, for simplicity I will refer to them as basic, mid, and premium. The basic and mid cover personal property on a NAMED peril basis, think fire, lightning, theft, vandalism etc. The premium covers personal property on an ALL RISK basis, with only the named exclusions, acts of war, nuclear perils, intentional acts, earthquake and one or two others that may escape me at the moment.

Erie does not in ANY manor limit what you can use to maintain your property so the comments about they would not cover my BX etc are simply wrong. During my tenure as an agent we paid several claims where policyholders had losses on very expensive tractors from fires etc.

What is limited is BUSINESS personal property, things you make money with. So if you charge your neighbor to mow his field or dig a ditch, all bets are off. There is then a limit of $5,000 for BUSINESS personal property.

Now personal property has a limit which is stated on your policy. In the event of a total loss there is a distinct probability that you could exceed that limit and perhaps fall short but you can increase that limit to be sure you are covered.

Erie covers you for liabilty and physical damage on and off your premises. Where the misunderstanding comes in is dependent on what level of policy you have, remember when I referred to basic, mid and premium? Basic and mid policies will not cover your tractor if you are towing it and run off the road, however the premium one would.

I have 4 tractors, the biggest is an 80 HP 4WD and numerous attachments, and I do not have any riders for them. I do not use any of them for business. I do favors for friends and neighbors but will not accept any money. I have a premium policy and sufficient personal property coverage in the event of a total loss.

There are agents out there looking to get all the premium dollars they can, and some that just do not know their business. Covering an expensive tractor on an inland marine rider is not a bad thing, but not always necessary.

When I spoke to our agent they called the underwriter (while I was there) and researched it - The underwriter (think that was the name at least) said that the only way to cover 100K+ in eqpt was the inland marine policy and no home owners would cover it. All are machines are personal use, and used at our home or friends/neighbors houses for free (Nonbusiness). I also can concern with trailering the eqpt - say for repairs so I wanted to make sure if something happened it would be covered.
Could this be a state by state thing? Saying it is misinformation is incorrect - in my case this is how it is working where we live, don't know why, but two separate agents said my homeowners would not cover it and the ONLY option was that inland marine policy. I had State Farm before we got Erie and when I asked them they also said they would not cover my eqpt under a home owners policy??

 

[ovrszd]

Same here. Have to purchase separate coverage. I use Inland Marine.

 

[HillStreet]

People pay $7 for a paperback book and read it cover to cover. They pay $400 for an insurance policy and throw it in a drawer unread.

You have to know the PERILS that are covered. Homeowners Insurance will probably pay for damage if your tractor was in a barn that burned, will probably pay for theft also. Inland marine coverage will pay for tip overs, and physical damage caused by trees falling on it. Have the talk with your agent and buy what you think you need.

 

[Storm56]

You may want to check that a premium is being charged for liabilty on your tractor, if not then you do not have it. I could not do that in PA. Liability for a piece of equipment came from a BOP, business owners policy.

Was walking out the door, my fingers got ahead of my brain.

I could not add a tractor to a commercial auto policy, for liability or physical damage. Remember I said equipment used for business was a whole different animal. I would cover such on a BOP type policy for physical damage and liability or sometimes I would use a CGL, commercial general liability which handled the liability and an inland marine for physical damage, depended on the risk.

 

[Fallon]

I've got an umbrella policy on addition to my homeowners insurance. A separate business policy for the tractor work. KTAC for the machine itself. Not sure if my impliments are covered under any of the policies. Dependin on circumstance they might be covered by homeowners, but I'm not counting on it & can deal with it if bad things happen & they aren't.

Loosing the $8000 trailer or mower & not having them covered would really suck, but it wouldn't kill or bankrupt me. So I haven't gone out of my way to make sure they are explicitly covered.

 

[Redbug]

I have had the KTAC insurance for more than 10 years. I think if you use the tractor off your property you need to get insurance for it especially.

 

[oosik]

To the point - you let go of any insurance when you have nothing to loose. Otherwise - without insurance you will be sued right into the poor house/debtors prison.

My philosophy - if you have a lot to loose; you better cover it all with insurance. You have nothing to loose; don't worry about insurance.

 

[Storm56]

When I spoke to our agent they called the underwriter (while I was there) and researched it - The underwriter (think that was the name at least) said that the only way to cover 100K+ in eqpt was the inland marine policy and no home owners would cover it. All are machines are personal use, and used at our home or friends/neighbors houses for free (Nonbusiness). I also can concern with trailering the eqpt - say for repairs so I wanted to make sure if something happened it would be covered.
Could this be a state by state thing? Saying it is misinformation is incorrect - in my case this is how it is working where we live, don't know why, but two separate agents said my homeowners would not cover it and the ONLY option was that inland marine policy. I had State Farm before we got Erie and when I asked them they also said they would not cover my eqpt under a home owners policy??

Underwriter is the correct term. Different states, different underwriters, different rules and opinions. That said I wrote a couple policies for people in your situation without resorting to inland marine coverage with the underwriters approval. We simply worked with the insured to make sure there was enough coverage for them in the event of a total loss. You obviously had a different outcome.

 

[bdog]

Liability and property insurance are two completely different animals. I would carry as much liability insurance as you can afford.

With property insurance it comes down to what you can afford to replace and your perceived risk of something happening and this holds true regardless if it is a car or tractor. There were times in my life where I had full coverage on a $4000 pickup because if something happened it would have been devastating to me but now I don’t have property insurance on my 25k tractor because it wouldn’t ruin me to have to replace it. It would stink if something happened to it, but I feel the risk of something happening is very low and I am capable of paying for it in the event it did.

Insurance is a transfer of risk and the insurer charges you for this. The decision on if it is a good choice or not varies from person to person and the value of the item being insured relative to your financial picture.

 

[finn1]

State Farm covers my tractor under my homeowners policy. I financed part of the purchase price with the credit union, and put them in contact with the agent to confirm coverage.. No issues (small town).

I do need separate policies for the boat, side by side and fifth wheel, but not the tractor.

 

[Fallon]

Liability and property insurance are two completely different animals. I would carry as much liability insurance as you can afford.

With property insurance it comes down to what you can afford to replace and your perceived risk of something happening and this holds true regardless if it is a car or tractor. There were times in my life where I had full coverage on a $4000 pickup because if something happened it would have been devastating to me but now I don’t have property insurance on my 25k tractor because it wouldn’t ruin me to have to replace it. It would stink if something happened to it, but I feel the risk of something happening is very low and I am capable of paying for it in the event it did.

Insurance is a transfer of risk and the insurer charges you for this. The decision on if it is a good choice or not varies from person to person and the value of the item being insured relative to your financial picture.

Yup. Dead on for pretty much all points.

 

[Beltzington]

Insurance isnt worth it when you can afford to replace the item yourself. So if loosing the machine & having to replace it wouldn't bankrupt you or severely impact your life, its not the economical solution in the long run.

Insurance companies are gambling that bad things won't happen to you at rates that pay out more than you pay in on average. They also need to make profit on the transaction & cover their overhead. So if you self insure, in the long run, you pay less overall.

Making payments on a new tractor or buying a new one outright might suck, but if you can reasonably afford to do that if required the odds are you will come out ahead. No guarantees on those odds, but it's better than Vegas.

I have KTAC on mine, but will likely drop it when it's paid off. I never get insurance on any thing under 5 figures... computers, appliances, tools, etc. I can afford to replace them if need be & in the long run I will statistically (not guaranteed) come out ahead. Plus dealing with insurance companies sucks (KTAC MUCH less than the rest though).

Liability is different. Not only are you legally required to have it in many cases (automobile). But most of us can't afford to pay out $100,000 to a million or more. So an umbrella policy for the house & general life stuff or a commercial liability policy makes sense.

I have out smarted myself with the same logic and lost so I always carry replacement coverage on any of my vehicles worth more than 10-years annual insurance premium. Do the math, it will take you 80+ years to replace a $25K tractor to save $300 per year on insurance. And unfortunately you are not going to finance a $25K tractor for $25/month and you will still be required to carry insurance. Ask yourself how you are going to feel about your choice to drop coverage if your tractor is stolen the following month. If you have a 1000 vehicles you may start to benefit from the statistical averages but the typical owner has no way to play the odds. Good luck with your decision.

 

[YLee Kioti]

I have 2 tractors and hay baler on my home and farm policy for less than 200 bucks a year . Farm Bureau

^^^^what he said!^^^^^^^
I got all implements and Mr. Kioti with our lil barndominium......around 723 a year w/Farm Bureau .....

 

[Code54]

It is just too cheap to not have the insurance on something like tractor/etc. You really have to shop around but there are some fairly reasonable deals out there. I just looked and when I added my 2015 Kubota KX91mini Ex to my inland marine policy it cost an additional $81 a year. That to me is worth the piece of mind to not have to worry if the building burns down with my machine stored in it. Between my tractor and mini Ex the loss would be big, way to big to risk for a a few hundred bucks a year. My biggest concerns are fire and theft but having the additional coverage is nice!

 

[TractorNH]

To all who rely only on their homeowner's policy remember, it only covers listed perils. If it is stolen, catches fire, a tree falls on it then it would be covered if those are listed perils. The damage WOULD NOT be covered if you roll it over and destroy your cab or bend your loader in the process (or any other damage from the use of it). Damage resulting from use or operation of the tractor WOULD NOT be covered. You crash it into your house, your house is covered for repairs, the tractor is not.

Since I don't use my tractor exclusively on my own property I searched for an inland marine policy and got quotes but the best coverage I found was a State Farm "Personal Articles" policy. It covers a $40k tractor with replacement cost up to the insured limit with a zero deductible for just under $500/yr. With a $500 deductible the premium drops to about $370/yr. Covers everything about the tractor except mechanical breakdown (though if a fuel leak caused a fire it would be covered since fire is a covered peril). This does not provide any liability coverage, only the tractor itself. As a first-time owner of a cab tractor I opted for the zero deductible at least for my first year because glass is expensive.

The "Personal Articles" policy is like a catch-all insurance that State Farm offers. My agent told me not only could I add implements but I could insure other high value items such as computers, jewelery, or even guns.

 

[oosik]

I will offer another example of insurance need or not. We came down from Alaska in '82 and built our PanAbode cedar home here that same year. Never owed a single penny on either the land or house. The house is insured thru State Farm. Even though the house was paid in cash, as it was built - I have never considered cancelling my homeowners policy with State Farm. Thirty six years here - no claims - still keeping the homeowners policy in force.

You want to take the risk on your tractor - be my guest. Just don't cry if something bad happens. Consider all the $$$$ saved.

 

[Groo]

I would hope a tractor would survive a tree fall reasonably well and at least be still functional. Keeping a 20lb extinguisher should be enough protection against fire. Not tons of theft around here, and I haven't heard of any tractor theft, but I supose it happens.

 

[majorwager]

Consider this: Generally the Homeowner's policy declared perils cover circumstances beyond one's own cotrol. ( fire, theft, vandalism) ect.

If you are so inclined to operate in a deliberate irresponsible manner and rollover the tractor, fell a tree upon it or drive it into a building, then you need inland marine coverage. Just because you did NOT intend the consequence, does Not mitigate the FACT that the operator placed the tractor in a position for the "Accident" to occur. Stupidity is however, insurable.

Insurance policies differ from state to state. There exists policies w/ greater degrees, (preminm) coverage. Coverage and Cost enjoy a direct correlation. Take Chubb as an example, just as good as Loydes of London.


Discuss they coverage you need w/ your agent. Weigh the options and costs. Tractor cowboys will and should pay more. No disrespect to genuine cowboys.

 

[Ritothebull]

I don't have insurance on my tractor so I don't park it under a tree.

 

[ovrszd]

I don't insure my equipment to protect it against me. I insure to protect it against others and Mother Nature.