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Machinery Loss of Use Coverage


What do you do when you have a claim with your tractor? What if your combine is damaged internally by a rock or it catches on fire. You cannot afford to be without this machinery so you rent a replacement.  Does your insurance policy pay for these rental costs? Your farm policy could pay for this but you need to make sure you have the coverage on your policy. The Machinery Loss of Use Coverage will pay for the rental costs of the replacement machinery if you can show that you need a replacement and the damage to your equipment is covered by the insurance policy.

In a number of cases I have seen the Loss of Use claim be larger than the Machinery claim.

You also need to make sure you have enough coverage. It used to be that a maximum $2,000 a day rental coverage with a maximum of $20,000 was enough. Today machinery rental rates are considerably higher. Farmers are telling me that they can easily exceed $2,000 in a day. For a very minimal difference in premium you should consider insuring at the higher level of $3,000 per day limit. You know your farm best, tell your broker what it costs to rent a combine for 15 hours and have to do this for 4 or 5 days.

Be sure to seek advice and purchase insurance from those who understand your business!