The old saying goes that a farmer is nothing without his horse & plow. That’s still true today, but of course, horses and plows have evolved into very complex and expensive machinery. You want to keep all this machinery in prime working order. After all, if something happens to it, then not only could the equipment sustain damage, but your productivity might also drop.
Most farmers carry property insurance on these items for times when an unforeseen hazard damages their equipment. However, another scenario that could impact operations is when a piece of equipment breaks down. Though the item itself might only need simple repairs, you might face lost time and money until you can have it fixed.
In this situation, a special type of insurance called equipment breakdown coverage might come in handy. Here’s how it works.
What is agricultural equipment breakdown coverage?
Sometimes, an essential piece of farming equipment will malfunction. Or, perhaps someone makes a mistake that damages the item. In either case, work might come to a halt and you could face additional property damage risks. If you have equipment breakdown insurance, you’ll receive compensation to:
· Repair the damage to the equipment
· Replace equipment with a new item, if necessary
· Recover income lost as a result of the malfunction
What items will it cover?
Equipment breakdown coverage can insure equipment throughout your property, including in your barns and other structures. It can also apply to certain systems within your dwelling. Some of the items it will insure includes:
· Ventilation systems, exhaust fans, heating and air systems
· Well pumps, water heaters, washers and dryers, boilers, irrigation pumps
· Milking equipment
· Alarm systems
One notable exclusion, however, is mobile equipment like tractors, forklifts, pickers, trucks and snowplows. These items often require specialty coverage of their own.
So, suppose that one day your milking apparatus breaks down from a problem in the motor. Not only can you not milk your cows, but you cannot harvest an essential product. If you make a claim on your equipment breakdown insurance, your policy can pay for both the item’s repair and income lost as a result of the down time.
Most of the time, the policy pays for the item’s value at the time of the breakdown. Additionally, you can buy an endorsement for your coverage that will allow you to upgrade your damaged equipment to a new item that is more energy efficient.
It’s important to remember that equipment breakdown insurance is not a product warranty. Warranties only apply to singular items and in some cases, they won’t pay for replacement items. They also will never pay for lost income. As a result, while you can still purchase a warranty depending on your preferences, equipment breakdown coverage is often more expansive.