Insurance Finance insurance coverage question

[Greenlantern]

Was looking at a TC40DA as a potential candidate for my new tractor, which I will be financing. When the dealer started doing his quote he mentioned the fact that New Hollands financing group required a collision policy on the tractors they financed and that most home owners insurance or farm insurance had no such coverage. For you prospective new buyers or brand new buyers, I was wondering if in fact you have discovered this to be true or is this just some B.S. the dealer was trying to feed me to hopefully later con me into buying there insurance?

 

[ODT]

CNH does require Physical Damage Insurance for an financed piece of equipment, basically it's insurance to pay off the note should the tractor be damaged/destroyed by fire, storm, collision, etc., more info here:

CNH Capital | INSURANCE | Physical Damage Insurance

Around here, most homeowners lump the tractor in with their homeowners policy, though where you are companies may differ. I'd suggest getting a rate from your dealer and then calling your homeowners rep and seeing what their quote is for the same coverage.

CNH likes to do the policy inhouse (more revenue), but they have no qualms about outside companies providing coverage, provided they document the coverage and meet the levels required by CNH.

 

[CJ4]

I looked at my contract when i purchased my TC55DA in Oct 05 and I paid upfront in the financing $681 with CNH for insurance for the 36mo period of their note. This is only "collison/comprehensive" insurance and no liability. I still think that's not such a bad deal for $30,000 plus worth of equipment. Especially in my situation where i unfortunately had to use it the first month i had the tractor. The bumper guard came unlatched and a stump shoved it into my one-piece fiberglass/plastic hood and busted some high-dollar headlights......ouch!!!! A whopping $3,800 worth of damage and they didn't bat an eye at it. They paid with NO hassle so IMHO they are a good company to deal with. Problem is i'm thinking of paying off my note in half the time but there won't be any insurance refund if i do.

 

[CurlyDave]

I don't know the specifics, but in general this kind of insurance is a bad deal.

Frequently, it will pay off the note, but that is all. The correct addition to your homeowners policy will cover damage, theft and liability.

Think about it, if you have two payments left, the tractor is mostly yours, but if the coverage is only for the note amount, it is very small.

 

[mathey]

actually, at least in my case...the CNH policy was less expensive and had much greater coverage than adding it to my farm policy

 

[ODT]

Pardon my poor explanation.

CNH insurance covers more than "just the note".

The insurance is for fair market value of a piece of equipment.

Hypothetical: You've got a TC40, 2.5yrs old worth 18k and you have but 5 payments left. Your barn catches fire and it with the tractor burns to a crisp. CNH insurance pays out the 18k, not just the 5 payments you have left.

 

[Red_Dog]

When we purchased our TC40D back in Feb of 2003, we thoroughly researched the pros & cons of the CNH Insurance. Since we trailer our tractor off our property for personal reasons (non-commercial) we determined the CNH policy was a better fit for us vs. a rider on our homeowners policy. This seemed to be a sticking point for our Inusurance company....will the trailer leave the property? I would check that out in detail for yourself if you will be trailering the tractor. All in all it appeared to be very good coverage and deal for us.

 

[Bird]

You want to read insurance policies carefully. Your homeowners insurance may cover the tractor, but probably only for such things as fire, wind damage, and theft, but not for collision, roll over, etc. And many policies only cover a tractor as long as it's on your property, but not when it leaves your property for any reason.

 

[jinman]

Problem is i'm thinking of paying off my note in half the time but there won't be any insurance refund if i do.

When your note is paid off, your insurance will still be good out to the 3-year term. Just the loss-payee will change to you instead of CNH Finance. As you stated, that's a pretty darn good policy. I suspect the rates would have been higher if you were using the tractor in a business though.

 

[CJ4]

Jinman,

I hope you're correct on that but I read my policy again and it sure sounds like the policy ends "........when CNH Capital's interest in this Dual Interest installment sales property ceases or on the expiration date of the certificate, whichever occurs first." This appears more than once in the policy. In my interpretation of this if the note was paid off early the policy ceases to exist.