JD Tractor Insurance - have you had a claim? What do you know?

[meburdick]

I have often wondered if you already have the John Deere coverage, then decide to purchase additional coverage from your insurance agent, and subsequently suffer a tractor loss the JD insurance will pay off the loan.
Wouldn't the additional insurance cover the cost of getting a new tractor without a loan or close to it ?????

No.

Your "personal" coverage would have to list Deere Financial as the primary payee because there's a lien on it. When the Deere coverage pays off the loan, your personal coverage kicks in and realizes there's no claim left to pay.

 

[smalltown]

So just to beat a dead horse. How would I or anybody else that had selected the JD insurance first cover themselves for replacement loss?

 

[meburdick]

So just to beat a dead horse. How would I or anybody else that had selected the JD insurance first cover themselves for replacement loss?

You get rid of the Deere policy and replace it with a personal policy.

It's *possible* that your agent may be able to sell you a "supplemental" policy that would cover any monies owed to Deere that might be unavailable with the original policy (odd form of loss, or something) and/or pay any residual value to you. The issue at hand is that the Deere policy covers *Actual Cash Value* a the time of loss. The ACV of the tractor will not be more than you owe during the first 12-18 months at least, so you're going to kick in your deductible plus more during this period. Once the loan amount falls below the amount owed, you're covered pretty well (except you still have to kick in the deductible amount).

If you want to cover yourself with something like Full Replacement Cost, you need to take that policy out on your own. And, as I said earlier, that policy will *replace* the Deere policy so you can stop paying for it. If you figured that cost into your loan amount, you may be able to lower the payment amount, or you may be able to shorten the term of the loan since the "premium" will drop.

 

[Jbell2355]

Thanks for the help gentlemen. I think there are a lot of guys out there who purchased the JD insurance and think they have tractor insurance, but apparently do not. My dealership sold it like it was a regular insurance policy.

 

[meburdick]

The dealers "don't care" about whether you're insured or not or how well you're covered. They know that the JD Financial requires insurance or they won't write the loan / allow you to take delivery, and they know that the JD insurance is "cheap" and easy to roll right into the loan. Also, their primary focus is to earn a good paycheck. Knowing the JD products is worth their while so that they can sell you that product and earn a commission on it. Taking the time to understand the insurance and sell on the premise of getting it from your own agent (and many people don't use agents) instead doesn't earn them any additional money. So, they don't spend the time learning those intricacies.

"Buyer Beware" has long been the mantra... For good reason. It's up to the consumer to ensure they are well-informed.

 

[Jbell2355]

Update:

I just got off the phone with Tim at Sentry (the insurance company who provides the JD insurance). His number is 877-782-6873, in case anyone else wants to talk to him.

He told me that in the next couple of weeks I should receive a certificate of insurance that will explain the policy in more detail but he also gave me the specifics verbally. The deductible if $500 if the tractor is being used for ag or personal use, and $1000 if used for commercial purposes. The policy covers just about every peril, including theft, vandalism, fire, flood etc. and it covers the unit while being trailered or being used on someone else's property. My concern was ill-placed...I am covered for my equity in the tractor. If there were a total loss, my loan would be forgiven and I would receive the balance of equity in the tractor minus my deductible. Sure, its for actual cash value, but that is all I should get. It wouldn't make sense for the payment to be based on the brand new cost...depreciation is real.

In short, the JD insurance seems too good to be true, but is true. The premium is quite low and it covers me anywhere for anything.

 

[meburdick]

Very interesting...

While ACV type coverage does make sense, you have to also consider the flip side of the situation...

At three years old, your tractor gets stolen and is not recovered. You get the ACV minus deductible, minus the loan payoff, in your pocket. Great.

Now... Go out any buy a replacement tractor. Sure, you have $1000 or so (maybe) to put down on the new machine. But, the machines are now more expensive (assuming you buy new) and you go back to financing at the same starting point.

If you had a private policy that insured for replacement cost, you're out your deductible but have a brand new tractor (or one VERY close in age, hours, and condition to the one you lost) and your loan doesn't reset. And, with the retail prices of used machines being high compared to new, you could maybe throw in a couple thousand more to get a new machine instead and be fully warrantied again.

I'm going to have a conversation with the JD Financial insurance folks and then with my agent... Since my policy is up for renewal at (essentially) double the premium of JD's, it's worth considering whether or not I should switch out.

 

[yelbike]

Very interesting...

While ACV type coverage does make sense, you have to also consider the flip side of the situation...

At three years old, your tractor gets stolen and is not recovered. You get the ACV minus deductible, minus the loan payoff, in your pocket. Great.

Now... Go out any buy a replacement tractor. Sure, you have $1000 or so (maybe) to put down on the new machine. But, the machines are now more expensive (assuming you buy new) and you go back to financing at the same starting point.

If you had a private policy that insured for replacement cost, you're out your deductible but have a brand new tractor (or one VERY close in age, hours, and condition to the one you lost) and your loan doesn't reset. And, with the retail prices of used machines being high compared to new, you could maybe throw in a couple thousand more to get a new machine instead and be fully warrantied again.

I'm going to have a conversation with the JD Financial insurance folks and then with my agent... Since my policy is up for renewal at (essentially) double the premium of JD's, it's worth considering whether or not I should switch out.

Jd insurance only insures themselve.

To put numbers on the example, assume a $20 000 tractor on 5 year term with no interest. If you buy jd insurance and you get a total loss on day one, they pay out 19.5k, and you go buy a new tractor,no biggie.

But lets say you have a total loss at year 4, by now you only owe $4k on the tractor the pay out is only $ 3.5k. Not so good. Because we all know the tractor was worth much more.

If you had private insurance, the first scenario would be mostly the same, but the second scenario would be totally different. Just because you only owe $4k at year 4, the tractor may still be worth $10k. Your private insurance would pay jd the first $4k and then give you a cash settlement on top of that of $5.5k so you can replace the tractor with a same used 4 year old tractor.

The one good thing about the jd insurance is the rates are based on a percentage of the remaining owed balance therefore the rates are continuously lowering. Also the jd rates will be less costly as you receiving less coverage. You get what you pay for.

Jd insurance only covers jd"s butt. Plus does jd give any liability insurance? Likely not.

 

[jd670]

Of the three JD tractors I bought from two different dealers, I was told that the JD insurance only covers the loan on the tractor. Yea it's covered for all of the above, but Jd gets the money not you. When your policy arrives, look closely at the lowering of the rates as time goes on. It will say actual cash value means cash that's owed on the tractor not what resale value is. Your better off getting covered from your homeowners policy. I declined JD's coverage all three times and had to show proof of insurance before dealer would deliver tractor. My homeowners covers everything but mechanical problems with no deductable and it was only a couple hundrend more per year. Well worth it to me.

 

[wbrowning]

I had a loss on a 457 Round baler due to fire I had no problems with John Deere credit they paid me what a baler that year model at that time would cost to purchase less 500.00. It was only 3 years old fire was my fault burning brush and set field and barn on fire no it was not a good day.