Insurance tractor voids insurance?

LarryD · Apr 25, 2006

Do you write off part of your house (small office) on your taxes? Seems to me that storage of business equipment might qualify your shop as a business related and therefore deductible as a business expense. Would a commercial policy covering the building be tax deductible?

The CFO has been looking into qualifying our property as tax exempt since we run a non-profit horse rescue. My main concern is that while I can get all kinds of tax breaks, any real property remaining should the rescue disolve will either be sold off or donated to another 501(c)3, including proceeds. Gotta make sure the tax man isn't going to come around for back taxes if we disolve later.

rollbar · Apr 25, 2006

I do store small tools in my garage for my carpenter work. I also park my pick-up truck in it too. I also store garden hoses,lawn mower,shovels,rakes, gas gans, etc. I guess to be safe I'll go ahead and get an additional policy to cover the building so I can store my tractor inside.What's 200.00 more a year ? man! If I let it set outside ,I think I would lose more than that on appearance and future value when I go to sell it.
Just another bill!!!!

chadincolo · Apr 25, 2006

Pretty common for insurance companies to not like equipment stored inside, increases the odds of multiple losses. Building catches fire, burns down, they pay to replace the building. Building burns down, has a $250,000 combine, $100,000 tractor, $75,000 planter, $50,000 truck... (farm equipment, you are talking Farm Bureau after all, they see tractor the same if it's 25 hp or 425 hp, sets the same flag up) Also common to refuse to insure if a workshop is attached to a storage building. Say you are welding, spark catches a rag on fire, spreads to gas cans near by, building catches fire, burns down, everything stored in it is a total loss. Try an insurance company with non-agriculture roots and you might get a different answer. It's all statistics, chances are slim that Geico has had to pay out big payments like above, I can guarantee that FB, State Farm, Farmers, etc. has, and looks for it.

Personally, I don't store a tractor inside unless I'm working on it. I've seen enough spontaneous tractor fires to not want to loose a shed and what's in it. They are after all tractors and are meant to be work vehicles, not babied.

LarryD · Apr 25, 2006

What would be the difference of my truck catching fire (aka Ford cruise control) or my New Holland (no recall so far) in my garage? It’s my property and I pay my insurance company to cover it. I even park my mower inside, does that double my risk.

My insurance company asked me quite clearly if I used my truck for work but never asked how I stored my fuels for what would seem almost surely be on site with 6+ acres. Although I am very careful to separate volatile fluids from the same space as my expensive equipment (150’) I have seen a lot of work shops that would send a fire safety inspector running.

I have a friend that keeps a 36’ Class A RV, a cherry 63 T-Bird, and a mint 69 Fire Bird in his shop. I would hate to see that claim if anything ever happened.

I guess my point is if my insurance company ever changed my coverage premium because I stored my tractor inside, I would have to look elsewhere for a company that was more agreeable to my equipment storage practices.

deere755 · Apr 25, 2006

My insurance guy came out last summer and walked around our place and he told me that since my tractor was under 25hp that my home owners would cover it. I don't know if that has anything to do with your situation or not. He also told me that if I went bigger than 25hp I would have to include it in the farm policy or take out a seperate policy on it. (farm is not at the house) Our boat is the same way because of the hp I have to take out a seperate policy for it. I think on the boat 75hp and under is covered by our home owners.

chadincolo · Apr 26, 2006

The thing to remember is that the insurance company doesn't care what might happen in your situation, they care what the odds are that company wide, X will happen, how much will it cost them, and charge individual insurance holders accordingly if their situation meets certain criteria. I'd be willing to bet that your friend with the RV, Thunderbird, etc has a policy on each of them, or his blanket policy is expensive. You have a separate policy on your pickup, your tractor is covered by a blanket policy. The ag background insurance companies say that the odds of losing a tractor (again, 25hp $10,000 or 425hp $100,000 they don't differential more than likely) goes up when it's in a building.

And it's not a recall thing, your tractor goes out, works, gets covered in dirt, bounces around, gets chaff all over it, it lives a harder life than your pickup. Break a plate in the battery, it overheats, the chaff on top of the battery catches on fire, burns the battery, then melts a fuel line...that doesn't justify a recall or a lawsuit, it's an accident. They don't happen often, but when they do then the insurance companies pay. That's what they look at, from their own company past payouts.

RobJ · Apr 26, 2006

I agree with Chad in Larrys friends case. The vehicles would not be covered in a barn fire. They must carry a separate policy. Plus a special special policy to get the full coverage of a 69 firebird. Usually proof of it's condition and a specific value. Sort of like itemizing jewerly. You pay for the value you put on it. I just emailed my agent about my tractor. I know the ATV's inside the garage at the weekend place are NOT covered under homeowners. I have a separate policy. About $10 a month, just if they are stolen, nothing else.

Rob

Her response....

 Tractor is covered as long as used to maintain the property. Keep in mind too, it must stay at the Elkhart property. I hope this addresses your concerns. Please let me know if you have more.

jsh · Apr 26, 2006

Since I recently purchased my first tractor (Kubota L3400) we contacted our insurance carrier at State Farm and told them that we were parking it in our shop which also contains 2 classic vehicles welding and other equipment and they explained that the tractor is covered under our home owners/umbrella policy with no cost increase and that the cars have a separate policies. They did heavily express to us that the tractor is only covered while on our property and not to take it anywhere else and that they require the tractor to be locked inside a building.

Captinjack · Apr 28, 2006

I hate insurance companies almost as much as I hate Lawyers! Life is too short to fool with so much fine print. Today it's this........tomorrow they change the policy and then it's that. Do all you completely read the policy revisions that are sent to you periodically? More importantly, does anyone understand all that fine print?

My buddie had to remove his super smoke house due to his homeowners policy insistence. Be danged.

They can stick their policies. I don't own ten cents worth of insurance that I'm not obligated by law to posess. Avoid the claim in the first place by observing safe practices and when the unavoidable happens, well the IRS calls it "uninsured casualty loss" which helps cover the $ making it not so bad.

8561 · Apr 28, 2006

( I hate insurance companies almost as much as I hate Lawyers! Life is too short to fool with so much fine print. Today it's this........tomorrow they change the policy and then it's that. Do all you completely read the policy revisions that are sent to you periodically? More importantly, does anyone understand all that fine print?

My buddie had to remove his super smoke house due to his homeowners policy insistence. Be danged.

They can stick their policies. I don't own ten cents worth of insurance that I'm not obligated by law to posess. Avoid the claim in the first place by observing safe practices and when the unavoidable happens, well the IRS calls it "uninsured casualty loss" which helps cover the $ making it not so bad. )

Nice. I sure do pity the family of someone you might accidentally cause injury to. You can be as careful as you want, sometimes things happen. If you're negligent, a good attorney is going to come after everything you own, and if he's decent, he'll get it. A simple cheap insurance policy not only will cover the cost of the negligence, it will also cover the cost to defend you. You might want to think about it....

As my grandmother used to say, "You only hate the things you don't understand."