Tractor insurance?

[Case485Guy]

Co-worker assumes note for a JJ6603,cab,FEL, round baler and a couple more implements from his uncle. Co-worker starts bailing hay to sell.On his second weekend bailer catches fire and both tractor and bailer are total loss. Anyone have info on how the insurance works in this scenario? He was talking to me about it today but I have no idea. My tractor/equipment is older and paid for.
Everything financed through JD credit.

 

[grsthegreat]

Im not sure if the fact that it has finance so it might be insured thru that.

Otherwise i have never heard of a tractor being covered under farm insurance unless it has an individual rider. I just went thru this myself on my new tractor. I have a farm policy and an umbrella cover, yet my tractor wasn't covered. I had to get an additional rider for the tractor. Mind you it only cost $155.00 for $45,000 worth of coverage. Full replacement less $500 deductible.

My State Farm policy ONLY covered SOMEONE getting hurt by the tractor...not the tractor itself UNLESS i had a rider. My agent told me that as far as he knew all policies are written that way. Its the same if you have a large jewelery, painting, gun, camera collection or whatever.

 

[Jamming]

Homeowners insurance here would cover this, but some states are different.
First thing I did was call my insurance company when I bought my tractor.

 

[JD 4520]

Co-worker assumes note for a JJ6603,cab,FEL, round baler and a couple more implements from his uncle. Co-worker starts bailing hay to sell.On his second weekend bailer catches fire and both tractor and bailer are total loss. Anyone have info on how the insurance works in this scenario? He was talking to me about it today but I have no idea. My tractor/equipment is older and paid for.
Everything financed through JD credit.

There has been a fair amount written on this topic on TBN so do a quick search, but if I read correctly, if JD credit is carrying the note then you can be most assured that it is also covered through JD insurance, that is almost a given.

Separately, homeowners insurance generally would not cover a loss like this in this scenario as it is being used in a trade or business which would call for separate coverage as such.

You should always deal with insurance first when dealing with a business and assets. I think you will be fine though given the coverage through JD. Having said that, it is possible to only cover the balance due on the note and not additional value should there have been more value than the outstanding balance.

Wish you well.

 

[grsthegreat]

Homeowners insurance here would cover this, but some states are different.
First thing I did was call my insurance company when I bought my tractor.

i hope your correct....i checked with 3 separate carriers (farmers, state farm and progressive) and all 3 stated that a tractor is NOT covered under homeowners insurance for replacement..only any damage that the tractor causes. in other words there is a liabiality coverage but not a comp/damage/replacement coverage. If the tractor smashes into my shop wall, the ins will repair shop ONLY. If a tree breaks off and destroys cab.....the operator is covered... not the tractor. the rider i got covered the tractor....PLUS it gave me coverage off of my property for snow plowing of roads.

 

[Case485Guy]

JD credit is carrying the note then you can be most assured that it is also covered through JD insurance, that is almost a given.

Separately, homeowners insurance generally would not cover a loss like this in this scenario as it is being used in a trade or business which would call for separate coverage as such.

I think you will be fine though given the coverage through JD. Having said that, it is possible to only cover the balance due on the note and not additional value should there have been more value than the outstanding balance.

Wish you well.

Thats pretty much what I told him. I am just guessing though. I told him the baling for hire could get him.

 

[Smallplot]

To get the insurance through JD they usually require insurance just like a local bank. Insurance is cheap for a tractor here on our farm policy and each piece of equipment is also listed. He may need to add the custom farming rider since baling hay for other individuals.

 

[Mudfarmer]

Thats pretty much what I told him. I am just guessing though. I told him the baling for hire could get him.

I suspect that JD insurance only covers JD's exposure to loss, not the whole tractor. I bought my 3005 with five year financing, the entire insurance bill was about $150. Since I now own about 50% of the tractor's equity, I suspect if I trash it, JD will get it's loan paid off, and that's all.
Mf

 

[JD 4520]

I suspect that JD insurance only covers JD's exposure to loss, not the whole tractor. I bought my 3005 with five year financing, the entire insurance bill was about $150. Since I now own about 50% of the tractor's equity, I suspect if I trash it, JD will get it's loan paid off, and that's all.
Mf

You are most likely 100% correct so consider the JD insurance to be loan insurance. Now that you have equity at risk I would get a separate policy either through your own carrier or JD so that you have the proper protection that you need.

 

[lost in wisconsin]

There has been a fair amount written on this topic on TBN so do a quick search, but if I read correctly, if JD credit is carrying the note then you can be most assured that it is also covered through JD insurance, that is almost a given.

Separately, homeowners insurance generally would not cover a loss like this in this scenario as it is being used in a trade or business which would call for separate coverage as such.

You should always deal with insurance first when dealing with a business and assets. I think you will be fine though given the coverage through JD. Having said that, it is possible to only cover the balance due on the note and not additional value should there have been more value than the outstanding balance.

Wish you well.

I agree with JD 4520's comment about inquiring with insurance prior. Seems there are a lot of individuals assuming they are covered only to find out too late, they are not.

Here is the list of questions I asked of our insurance agent prior to our tractor being delivered:

* Is it covered under the existing home owner's龍 policy?
* If so, does that include theft from our property, damage on our property and liability on and off our property?
* Is the coverage for replacement value?
* The purpose of the tractor is to help around our acreage. We would not be doing any commercial business (i.e. lawn mowing or snowplowing) with it but on occasion we may help a neighbor or family member with a task that requires a front end loader.
* Would it be covered in transit to the other party regardless whether we drove it there or placed it on a trailer?
* Would it be covered if it were damaged at their property?


And her response...
The tractor is covered under your personal property on your homeowner's policy. It is covered for theft, damage such as hail, wind, fire. It is covered for replacement value since you have replacement coverage on your policy. You are covered for liability on your property
but not away from your property. It would be covered in transit if something happens to it due to a covered loss. Lets say you were in an accident and the tractor was damaged, you would have coverage for that. If it is a mechanical or maintenance issue, there would not be coverage. You have some coverage for personal property away from the residence, but it has to be for a loss that is covered under the policy. Liability would not be covered at another property.


I hope this helps

 

[smalltown]

I suspect that JD insurance only covers JD's exposure to loss, not the whole tractor. I bought my 3005 with five year financing, the entire insurance bill was about $150. Since I now own about 50% of the tractor's equity, I suspect if I trash it, JD will get it's loan paid off, and that's all.
Mf

Mudfarmer is correct in that the JD insurance only covers JD's exposure to the loss. It is a declining insurance in that as you pay off your note your balance to JD financial is less so the loss to JD is less. It is not automatic you need "opt in" to pay for the insurance as a seperate item when purchasing the tractor. As I recall for my JD 2520 last summer it was around $250 for the life of the loan, and I think there was a small deductable approximmately `$500 on my part.

 

[chevy]

Mudfarmer is correct in that the JD insurance only covers JD's exposure to the loss. It is a declining insurance in that as you pay off your note your balance to JD financial is less so the loss to JD is less. It is not automatic you need "opt in" to pay for the insurance as a seperate item when purchasing the tractor. As I recall for my JD 2520 last summer it was around $250 for the life of the loan, and I think there was a small deductable approximmately `$500 on my part.

That is not the way it was explained to me when I got my 2720. Because of threads like this, I asked my dealer if JD insurance just covered the loan balance or I had full coverage on the tractor. I was told I had full coverage as long as I had a balance on the loan with JD credit until the final payment date.
I ended up adding the tractor to my business policy, so I did not get the JD insurance.

Here is a link to the JD insurance FAQ page.

Insurance FAQs : John Deere Financial

 

[Case485Guy]

JD insurance is going to pay the balance of the loan. There were a couple more implements on the same loan from what he explained to me. Will be interesting how they adjust out the tractor and bailer. Tractor did not even have 600 hrs on it.

 

[JD 4520]

That is not the way it was explained to me when I got my 2720. Because of threads like this, I asked my dealer if JD insurance just covered the loan balance or I had full coverage on the tractor. I was told I had full coverage as long as I had a balance on the loan with JD credit until the final payment date.
I ended up adding the tractor to my business policy, so I did not get the JD insurance.

A thought of caution, I wouldn't rely on information from the dealer when they really don't know. Talk to JD finance directly as they are the only one that can make the representation. Next, the JD site provided did not address the answer that you presented in fact led you to believe that in fact the insurance only covered the outstanding and declining loan balance and was silent to any excess coverage. JD finance is only interested in insuring the payoff of the loan not insuring the asset.

 

[JD 4520]

JD insurance is going to pay the balance of the loan. There were a couple more implements on the same loan from what he explained to me. Will be interesting how they adjust out the tractor and bailer. Tractor did not even have 600 hrs on it.

This is consistent to the theme of this thread as JD finance is only interested in insuring the loan balance for payoff.

 

[blueriver]

Question ... Is all JD insurance for "loan balance" or do they write "replacement cost"

I have seperate policies for my tractors thru CNH and they are for "replacement cost"

I am leary of counting on home owners. My agent says as long as its on my place its covered with the same ded as my home owners. But with CNH I'm covered... in transit, accidental damage, fire, flood, rollover, vandalism, theft with a $200 deduct.

So ... my neighbor just bought a 5083E at $41,500 put $10K cash down and took the JD 0% financing ... took delivery last week. If that puppy burns up today ... he only gets the financed balance out of the JD insurance? If so that sucks.

 

[chevy]

A thought of caution, I wouldn't rely on information from the dealer when they really don't know. Talk to JD finance directly as they are the only one that can make the representation. Next, the JD site provided did not address the answer that you presented in fact led you to believe that in fact the insurance only covered the outstanding and declining loan balance and was silent to any excess coverage. JD finance is only interested in insuring the payoff of the loan not insuring the asset.

I stand by my statement that the tractor has full coverage with JD Insurance. When there is a partial or total loss, a check is mailed to the owner, made out to the owner & John Deere Credit.

One of the questions in my link was about a partial loss. The insurance company sends the owner a check to the owner made out in the names of the owner & JD Credit. The owner had to send a workorder for the damage along with the endorsed check to JD Credit. JD credit would endorse the check & send it back to the owner so repairs could be completed.

Another question was about a total loss. The insurance company sends the owner a check to the owner made out in the names of the owner & JD Credit. The owner sends the endorsed check to JD credit. They apply it to the loan balance. That is the end of the answer. There are to many options for them to go any further with the answer.

1. If the loan balance is higher than the check, the owner still owes the remaining balance.

2. If the check is higher than the loan balance, JD credit owes the owner the excess amount. It would be theft if the remaining amount was not returned to the owner.


It could be that all dealers are not offering John Deere insurance. Some dealer may be of selling insurance from another company, because they can make a higher profit. That insurance may only cover the loan balance.
With that type of insurance, if there is a total loss, the payment would go directly to JD Credit, the owner would not be involved other than filing the claim.

 

[JD 4520]

I stand by my statements as well and then I'll be done.

1. If you separately purchase asset insurance from JD, then yes it will cover the asset; that is not what this topic is about.

2. As you state, JD financing insurance ends at the payoff of the loan whether it is paid through the term or paid off early, note, insurance terminates.

3. Why would insurance terminate just because the loan is paid off? Because it is a "mortgage insurance" and no longer needs to be in place. If it were asset coverage then it would have no relevance to the loan whether one existed or not.

4. Why is the coverage cost for this mortgage insurance so cheap? Because it covers the declining value of the loan not the asset. If you purchase a tractor and do 100% financing, the cost of insurance is higher than if you made a 50% down payment and financed the balance. Why? Because it is only insuring the loss of the loan.

5. Yes, you can purchase full coverage insurance through JD, it is a separate policy and continues beyond the life of the loan and is irrelivent to the amount or term of the loan because it is true asset insurance.

Don't be fooled and don't mix the two concepts or you take the risk not the insurer.

 

[chevy]

I stand by my statements as well and then I'll be done.

1. If you separately purchase asset insurance from JD, then yes it will cover the asset; that is not what this topic is about.

2. As you state, JD financing insurance ends at the payoff of the loan whether it is paid through the term or paid off early, note, insurance terminates.

3. Why would insurance terminate just because the loan is paid off? Because it is a "mortgage insurance" and no longer needs to be in place. If it were asset coverage then it would have no relevance to the loan whether one existed or not.

4. Why is the coverage cost for this mortgage insurance so cheap? Because it covers the declining value of the loan not the asset. If you purchase a tractor and do 100% financing, the cost of insurance is higher than if you made a 50% down payment and financed the balance. Why? Because it is only insuring the loss of the loan.

5. Yes, you can purchase full coverage insurance through JD, it is a separate policy and continues beyond the life of the loan and is irrelivent to the amount or term of the loan because it is true asset insurance.

Don't be fooled and don't mix the two concepts or you take the risk not the insurer.

I am not mixing the 2 concepts.

The insurance ends because JD Credit only requires that what you financed be insured for the term of the loan. They do not care if the item financed are insured after the loan is paid.

Since you brought up mortgages. Even if I have mortgage insurance, I am still required to have property insurance.

The same is true with John Deere Credit.

 

[grsthegreat]

I specifically checked with my agent about insurance of a tractor (state farm) and he stated the following...and said it holds for ALL underwritten policies.

1. When you buy homeowner insurance, you have to specifically list the buildings that are on the property. These buildings are then covered (less deductible).

2. Any vehicles have to have their own coverage, even if their just stored in the garage.

3. All policies have a contents insurance clause whice allows a certain percentage of the structures value to cover general contents. For example, if the Structure is insured for $300,000 and the content clause allows for 20% content coverage, than the policy will ONLY pay out $60,000 for loss of contents (not counting structure). All policies state in writing what the allowed content inclusion is. IF YOU have any expensive collections, expensive cameras, expensive gun collection or jewelry THEY MUST have their OWN policy or else be lumped into the general contents rules.

4. If i had a tractor and ran into the side of my building, the building IS covered..the damage to tractor isnt. If a tree breaks off and destroys the cab of my tractor..... NO COVERAGE.
If the snowblower lobs a rock and destroys the neighbors window...no coverage (ALL work done off my residence is not covered unless the tractor has a comp/collision policy of its own. Any work done snowblowing off of my property is not covered.
If the tractor is INSIDE my shop and the shop burns down, the tractor would/may be covered under the contents clause.....but open to contention in a claim.


Personally for a few hundred a year i feel better having a policy on my tractor that covers everything i do with it. If its stollen its 100% covered with $500 deductible. Also, all the implements are covered less deductible.