Pro / Cons of KTAC?

[mljenkins]

You would be wrong! KTAC covers your machine even if it's used commercially or off-property. I was rather concerned about that as I do side work with mine & am covered. My dealer indicated friends & family using the machine would be covered too. Not clear on renting it out as nobody but me wille be using my machines for hire. Family uses it on property. I really won't loan the tractor out to friends either, I go with it & they owe me (and usually cover running costs). I'd confirm all those details with KTAC though.

Thanks Fallon, I’ll be checking into that. I wondered about doing side work with it and how that would work. Much appreciated info.

 

[cold1313]

From KTAC - Mechanical Breakdown is listed as "exclusions"....thought that if something broke - it was covered?

Exclusions Include, But Not Limited to:
Loss or Damage by Fraudulent Activities
Government Action or Seizure by Government Authority
Mechanical Breakdown
Wear and Tear
Nuclear Accidents
War
Terrorism

 

[bspeedy]

^ A few things I think you're missing (don't get me wrong, I'm no fan of insurance companies) but there are many instances where you must have insurance.

For instance, if you have a mortgage, unless you have enough money to pay out a total loss (in which case I suppose you wouldn't have a mortgage), you'd be required to have home insurance. For vehicles, on public roads at a minimum usually you are required to have third party liability. To get a loan to purchase my tractor, Kubota required proof of insurance (didn't have to be their insurance, just so they were covered in case I wrote it off).

I think in a lot of instances nowadays, people have insurance that can save your butt in the case of a lawsuit.

Again, I'm no fan of insurance companies, but for certain instances it's usually mandatory, and in a lot of cases, even just peace of mind (lawsuits etc).

Would be nice to be in a position to self-insure, but I don't see that happening, at least for myself!

Of course I am fully insured against liability. I have homeowner's also, as I cannot afford to replace my home (and I have a mortgage).

How about a silly example:

Do you insure your clothes against damage? Why not? Clothes get damaged / stained / torn. You don't insure them because you can afford to replace them. Most of us can afford small hits to our pocketbooks if they don't come too frequently. You just have to find that number for yourself and update it based upon your situation. For me, anything over about 5 grand would be a real issue. If you had asked me 20 years ago, my number would have been anything over 50 bucks! My goal is to lower my insurance costs and self-insure for the cheap stuff. The definition of 'cheap' is different for each of us.

One good example is life insurance. I am in my mid-40's with two small children and a mortgage. I have term life insurance for myself for about 7 times my annual salary. We also have a policy on my wife of about 5 times her annual. This insurance is necessary because people are counting on us for money / support. I need my wife's income and her help with the kids. Not having that would bring a cost that would be difficult to bear. She counts on the same from me. Life insurance will allow her to quit working, look after the kids, and provide for their educations.

Fast forward 20 years. I'll be mid-60's. HOPEFULLY retired. Kids will be grown and educated. No need for life insurance because no one needs my wife or me financially. Everything will be paid for and money from investments will cover living expenses for my wife if I go first. Makes no sense to have life insurance at this point.

My only suggestion is for each of us to look at our situation and decide if we really need insurance. For me, the answer is simple.

 

[Fallon]

Of course I am fully insured against liability. I have homeowner's also, as I cannot afford to replace my home (and I have a mortgage).

How about a silly example:

Do you insure your clothes against damage? Why not? Clothes get damaged / stained / torn. You don't insure them because you can afford to replace them. Most of us can afford small hits to our pocketbooks if they don't come too frequently. You just have to find that number for yourself and update it based upon your situation. For me, anything over about 5 grand would be a real issue. If you had asked me 20 years ago, my number would have been anything over 50 bucks! My goal is to lower my insurance costs and self-insure for the cheap stuff. The definition of 'cheap' is different for each of us.

One good example is life insurance. I am in my mid-40's with two small children and a mortgage. I have term life insurance for myself for about 7 times my annual salary. We also have a policy on my wife of about 5 times her annual. This insurance is necessary because people are counting on us for money / support. I need my wife's income and her help with the kids. Not having that would bring a cost that would be difficult to bear. She counts on the same from me. Life insurance will allow her to quit working, look after the kids, and provide for their educations.

Fast forward 20 years. I'll be mid-60's. HOPEFULLY retired. Kids will be grown and educated. No need for life insurance because no one needs my wife or me financially. Everything will be paid for and money from investments will cover living expenses for my wife if I go first. Makes no sense to have life insurance at this point.

My only suggestion is for each of us to look at our situation and decide if we really need insurance. For me, the answer is simple.

Insurance is jusr a risk mitigation strategy. Most people can better budget a few hundred a month for insurance than they can several thousand occasionally for an accidental that may or may not be in their control.

I'll keep KTAC after I pay off my L4060 as a hedge against catastrophic failure & unplanned expenses. My daily driver Toyota Tacoma & the wife's Ford Escape are fully insured with a high deductable. I can afford several grand for some decent damage & really could afford to replace them (payments rather than paying cash for them years ago, but still replace them). My beater F250 on the other hand only has liability coverage. Less value on it to work about replacing.

It's all about how much are you willing to pay slowly over time to prevent paying out a lot in an unlikely situation at some random time in the future. In a perfect world those 2 numbers would end up being the same over the long term. In the real world burecracy overhead & insurance company profits end up making insurance cost more. So it's wise to only insure that which you can't afford to replace yourself. I tend to insure some bigger ticket items like the main cars even though I could afford to replace them as a risk mitigation strategy.

 

[4570Man]

I can give you a con of any insurance. You pay out with no guarantee of recouping anything. My goal is to self insure on anything up to about 10 grand, including the house. If you look at severe tractor damage, most of it is preventable or at least largely avoidable. A 'total loss' situation is very rare. For example, my tractor is worth about 15k. If I drop a log on it damaging the hood and grille with the headlights, damage would probably be over a grand for new parts. Would the old hood still cover the engine? Sure. Would it still work (with a little beating)? Of course. If I were so picky that I could not stand the ugly old hood and grille, would I be able to buy brand new pieces for the price of 5 years of KTAC? Probably.

I guess my point is - use your car / tractor / equipment with care and skip the extra insurance. Save the money. If something happens and it needs fixed, write the check with the money you've saved. No paperwork, no begging an insurance company for help, no justifying, persuading, etc. You have full control of the situation without a third party.

Insurance is a nearly guaranteed loss for the insured. Add up the $$$$ you've spent in your life on insurance and add up your claims. You (and I, and almost everyone else) are thousands of dollars behind. Only people in special circumstances - hurricane damage, floods, 80k vehicle that is a total loss, home completely destroyed by fire - recoup their money and then some. Insurance companies are wildly profitable.

You must manage your money a lot better than most people. I know plenty of people that couldn't afford a $100 unplanned expense. $1000 would be devastating to most. Personally I sleep better at night spending $200 a year for theft insurance on the tractor. That and the mule is really the only unnecessary insurance I have.

 

[bspeedy]

You must manage your money a lot better than most people. I know plenty of people that couldn't afford a $100 unplanned expense. $1000 would be devastating to most. .

I spent a few years not managing my money properly. I have shown better discipline over the last 15 years. Some people call me cheap. My car is a 2002 with 200k miles. Pickup is a 1999 with 150k. Wife drives a 2008 model - that is the 'new' car. Buddies at work make fun of me for my iphone 5 that I got for free. Laugh all you want. I am proud to live well below my means. I have learned to value things that increase my net worth, and the latest gadget or new car does nothing but ERODE my net worth. Sorry - I'm preaching now...

 

[cold1313]

Yes - none of this has to do with my question of why "mechanical breakdowns" are listed under "exclusions" for KTAC yet people still put claims against KTAC for breakdowns?

 

[Rock Crawler]

Yes - none of this has to do with my question of why "mechanical breakdowns" are listed under "exclusions" for KTAC yet people still put claims against KTAC for breakdowns?

I think I may have stated earlier in this thread, but when I talked to the fellow at KTAC he flat out told me that if I were working and an axle broke (mechanical break down) it would not be covered. But then as an example, he said that if I backed into a tree hard with the tire and broke the axle, this would be a crash or accident that caused the broken axle... so this would be covered. So he said that it all depends on the conditions around the part damage. Was it a naturally occurring failure or was it a result of a crash/accident? That was how he explained it, and I think I understand it.

If your HST pump wears out, you can not call KTAC. I guess if you roll the machine and it runs upside down and runs dry, thus destroying the HST along with the diesel engine... that would be covered.

 

[cold1313]

I'm surprised no insurance agents have chimed into this thread...or they aren't saying that they are.

State Farm has quoted me a policy just for the tractor. Slightly less than KTAC and seems to cover everything KTAC would. For some reason though, I feel like KTAC might be the way to go - just because I would assume they'd be easier/faster to get claims approved and my tractor back.

Where I might have issues is my 2014 machine, since it is paid off. I'm guessing the rates might not be so attractive.

 

[Rock Crawler]

I'm surprised no insurance agents have chimed into this thread...or they aren't saying that they are.

State Farm has quoted me a policy just for the tractor. Slightly less than KTAC and seems to cover everything KTAC would. For some reason though, I feel like KTAC might be the way to go - just because I would assume they'd be easier/faster to get claims approved and my tractor back.

Where I might have issues is my 2014 machine, since it is paid off. I'm guessing the rates might not be so attractive.

The rates are simple to calculate. I just called them last month (November 2017) and as of this time it is $15.60 per thousand covered, you pay the year up front. So if you have a machine that you state the replacement value at $20,000 it is simply 20 x $15.60 = $312 per year at the stated value, the $312 is paid by credit/debit up front and then within hours they email you the contract. I stated the value of my 2013 BX25D at $15,000 since I feel that for right around $15,000 I should be able to find another low hour BX25D.