KTAC vs Erie Tractor Insurance

[Pburchett]

With my last payment on the tractor coming up soon I was looking at continuing insurance coverage. I was comparing KTAC and Erie insurance for tractor coverage.

My 2016 Kubota MX5200HST is valued at $29,650 according to KTAC.

The KTAC policy will cost $670 per year and the Erie policy is $110 per year as a homeowner endorsement.

Each policy has a $250 deductible while Erie only pays 80% of the actual cash value. I did find some unusual things like infidelity and secretions are not covered! I am still a little confused about part 11. C. 1) and the wording about compaction and grading , so I presume that is their way out of overturns (grading) and sinking up (compaction)?

So far I have only managed to get the tractor stuck, bend the grill guard and front weight bracket and break a rear tail light. I don’t abuse my equipment but I use them as needed. I live on very hilly land but I use the seat of my pants and a little common sense as a clinometer and so far have never turned over.

I guess I am more worried about barn fire or a barn collapse in wind more than me breaking the tractor. I do trailer it a couple of times a year on some very poor, curvy, hilly and narrow roads to another property I own which is 60 miles away.

I know the $670 is not a lot in terms of replacement parts, but I still hate to pay it. Any suggestions or comments on the Erie policy?

 

[D2Cat]

I'd think the best advise you could get is from the agent selling the products you are considering. Be sure you know and understand what the KTAC cover and the deductible and the compare that to other companies. My guess is your homeowner's policy will come up short of the KTAC because of no coverage for mechanical damage, like seized engine! Or, covering losses while using the machine on other's property?

 

[je1279]

80% of actual cash value scares me. In the home insurance world, I look for policies to cover the replacement cost of items. Say you paid $45k for you tractor new and they say it's now worth $30k with depreciation. 80% of $30k is $24k and say to buy the same tractor now costs $50k. I believe KTAC will pay 100% of the original purchase price for a total loss. One way your out $5k and the other way your out $26k. Just something to consider.

*Edit* See below as KTAC covering 100% of the original purchase price only applies if the tractor is currently financed through Kubota Credit.

 

[Hobbit Habits]

I am VERY interested in this thread as I try to complete due diligence on coverage for my Kubota contract, Woodmaxx implements, and a new trailer. All-in this is a $42K purchase with 32K of it going to the Kubota contract. Obviously I would need to look to my insurance company for covering the Woodmaxx gear and trailer. I confirmed with KTAC that coverage for the 32K would be $500/year. My personal agent and I reviewed the KTAC coverage and he put together a policy that matched with a $250 deductible and replacement value coverage for both the Kubota contract (32K) plus the Woodmaxx implements and trailer. (We bumped the deductible on the trailer to $1000 since it's not on the road that much anyway.) This covers the equipment when on my property, someone else's property, and while in transit. Also has a $1M liability riding with it if I injure anyone, etc. What it doesn't cover is transport to/from the dealer but my small town dealer would help me out with that anyway. This Acuity policy will cost me $216/year and cover ALL my purchases listed here. I was not aware that KTAC covered mechanical failure though (like the engine seizing or blowing up). Is this even outside the warranty period? Where do they draw the line between an accident (rollover, twisting the loader frame, banging an implement off of a tree) and mechanical failure (engine seizing, blowing out a hydraulic line, etc.)? I want apples to apples comparison to go in knowing what is and isn't covered. I guess I need to compile an exhaustive list and do more digging. Help!

 

[je1279]

80% of actual cash value scares me. In the home insurance world, I look for policies to cover the replacement cost of items. Say you paid $45k for you tractor new and they say it's now worth $30k with depreciation. 80% of $30k is $24k and say to buy the same tractor now costs $50k. I believe KTAC will pay 100% of the purchase price for a total loss. One way your out $5k and the other way your out $26k. Just something to consider.

Turns out KTAC may not offer the replacement cost option unless your tractor is currently being financed through Kubota Credit.

 

[Fido Farms]

My understanding is once the tractor is paid off no more KTAC. Thats what Kubota told me.

 

[je1279]

My understanding is once the tractor is paid off no more KTAC. Thats what Kubota told me.

They offer an annual policy after its paid off but I cannot find any specifics on the coverage. Tried adding the brochure but the file was too large.

 

[Hobbit Habits]

They offer an annual policy after its paid off but I cannot find any specifics on the coverage. Tried adding the brochure but the file was too large.

You are correct je1279... KTAC Rep told me the replacement coverage is only available while the machines are under finance contract even though you can continue coverage with them.

 

[TX Chris]

It's hard to compare the brief overview of KTAC to the detail shown for Erie.

IF the KTAC policy is a buy-back policy like the one offered with a financed Kubota, it's hands-down the winner. But understand that the standard KTAC policy is not a 'replacement' policy as many people misunderstand it. They buy back your tractor for exactly what you paid for it. They do not buy you a new tractor. You must buy a new tractor of equal or greater value within 60 days to receive the full amount, otherwise they only give you market value at the time of loss. And you're on the hook for the cost of inflation or any upgrades you buy the second time around.

 

[NHSleddog]

I have a buddy with a "homeowner" policy that thought he was covered.

He lost a 40K JD in a shed fire last November and his mower was covered but not the tractor. He is fighting the losing legal battle right now.

Agents being salesman tend to yes yes yes a lot. Check the fine print. If the agent can't locate the fine print, you can be sure he has never read it himself.

 

[Hobbit Habits]

I have a buddy with a "homeowner" policy that thought he was covered.

He lost a 40K JD in a shed fire last November and his mower was covered but not the tractor. He is fighting the losing legal battle right now.

Agents being salesman tend to yes yes yes a lot. Check the fine print. If the agent can't locate the fine print, you can be sure he has never read it himself.

Exactly NHSleddog! You should never assume a homeowners policy covers these things (or all of your toys for that matter). Your friend is fighting an uphill battle as I'm sure Insurance Companies get sued 100's of times a year for this very situation. Know what you're buying and challenge any salesperson that tells you different!

 

[DustyRusty]

Paragraph 1, they give it to you
Paragraph 2, they take it away
Paragraphs 3-12, they tell you all the reasons why insurance doesn't apply.

Read your policy, and if the agent says that something is covered, that you can't find in the policy, then send them a letter asking the question, and request a written reply. That way you have proof that the agent said it was covered, when the policy said it was not. All insurance agents, carry errors and omissions insurance to cover their ass, when they screw up.

 

[NCL4701]

1. Don’t forget liability insurance. Injury to others, hazmat cleanup, even hitting a utility line can make the cost of the tractor look like chump change.

2. If you bought a car, boat, motorcycle, airplane; you wouldn’t expect your homeowner policy to automatically cover the physical damage and liability (at least I would hope not) so why would anyone just assume they’re homeowner policy covers a tractor?

A standard homeowner policy is designed to cover a standard homeowner: house, mower, a couple of unattached structures like a small shed/fence/average pool, general average personal property, and the average liability exposure that comes along with owning a home. If you have $50,000 worth of jewelry, or a $100,000 painting, or you’re running a business out of your detached shed, or you have 100 acres, or you have a TRACTOR there are a variety of endorsements and stand alone policies to address those exposures but to “assume” that a standard cookie cutter policy such as a homeowner policy is going to cover your tractor is a good way to get a nasty surprise when you have a potential claim.

Basic problem with “tractor insurance” is the same model may be used in a variety of ways so there is no one size fits all insurance.

For the owner, the risk of damage to the tractor is the same but the liability exposure of a homeowner with a few acres is different than a farmer, landscaper, golf course, etc. so they all need somewhat different coverages.

From the insurance company side of it, the risk of damage to the tractor and risk of incurring a liability claim varies depending on use, so the appropriate premium for the exposure also varies.

Available coverages are going to vary a bit depending on state and country. Only way to really get the coverage for the tractor and associated liability right is to consult with a local agent who has experience covering equipment. Even if it was my current agent that I liked, if no experience covering equipment I’d get a second opinion from someone with experience.

Reading the policy is great advice but they don’t make them easy to read. For instance, the 80% thing in the Erie policy: that’s a rather awkwardly worded but common coinsurance clause that says if the amount of insurance carried is less than 80% of the value of the equipment at time of loss they pay their prorata share of the loss, not the whole thing. So if you have a $20k limit on a $60k tractor, you insured it to 1/3 value so they pay 1/3 of the loss. If you insure it to at least 80% value they don’t take that deduction. BTW, with all due respect to anyone reading this, that wasn’t a question or a “IMHO” that’s actually what it is.

Not advocating everyone get as much insurance as possible. Just advocating get the real options from someone local that is experienced insuring equipment and make an informed business decision on what you want/need. As suggested by others, if your agent tells you your basic homeowner policy covers the tractor and associated liability that may be correct, but get it in writing and save it for as long as you have the policy.

And a question: I hear about KTAC in these forums. My dealer didn’t mention it to me. Don’t know why but I didn’t finance so maybe that’s why? Anyway I have no knowledge of the KTAC policy. Sounds like good coverage on the physical damage for the tractor, but does it provide any coverage at all for liability?

 

[Pburchett]

Here is what I have found:

Erie Insurance on the homeowners police $110 a year. Does not cover as much as KTAC.

KTAC $670 a year. $15.31 per $1000 value of loader & $22.50 per $1000 value of tractor.

Underwritten by Ohio Indemnity Company.





Now the new stuff:

CNH Physical damage Insurance is as follows:

Underwritten by Wesco Insurance Company

$200 Deductible policy = $370 per year

$500 Deductible policy = $321 per year.

$10.52 per $1000 on tractor and $12.43 per $1000 on loaders.

Looks as if CNH also covers the clean-up of pollutants (diesel and oil spill) along with tires and tubes.

I am going to call and get a Policy from Wesco Insurance Company.

I did call a few (10) close New Holland dealerships and talked to them about their experience with the CNH insurance. Some dealers tried to steer their customers to their local agent to keep the money in the community or had never received a claim, or complaint or had any issues getting the equipment fixed with the CNH insurance. One person I spoke to even did the appraisal and estimates for their shop.



I’ll post more when I learn more.

 

[Hobbit Habits]

Thanks for the detailed info Pburchette... just for clarity you obviously picked a bit on your quote for a $500 deductible. I presume you meant $332/year? (Not 3321.)

 

[Pburchett]

Sorry That was $321 per year. I fixed it.

 

[je1279]

Is CNH's coverage for actual cash value of the equipment if it's not currently being loaned or leased?

 

[MNVikingsGuy]

My understanding is once the tractor is paid off no more KTAC. Thats what Kubota told me.

No KTAC required, but still an option. But I bought mine new with cash and still got KTAC over homeowners (for reasons discussed in similar thread this week). As I understand the only difference is the rate is a little lower and the payout for a total loss is cash value rather than replacement value (which accounts for the premium difference). (but not 80% of cash - that sucks)

 

[Elliott in GA]

And a question: I hear about KTAC in these forums. My dealer didn’t mention it to me. Don’t know why but I didn’t finance so maybe that’s why? Anyway I have no knowledge of the KTAC policy. Sounds like good coverage on the physical damage for the tractor, but does it provide any coverage at all for liability?
[/QUOTE]

FWIW, KTAC provides $200K liability. I spoke with my home insurance carrier, and they will pick up on the liability until I reach my umbrella's floor of $500K. Homeowners and umbrella are both with Cincinnati. They are also extending my homeowner's liability coverage to some land we own 4.5 hours (by car) away for $50 a year as an endorsement.