Insurance is one of those things that we tend to resent buying, yet it is essential. We buy insurance for our homes and cars and other expensive items, but what about insuring machinery? If you are a contractor or perhaps run an equipment hire business, you need to ensure all your equipment correctly. However, it’s easy to make a mistake and get the wrong package.
Here are the five main mistakes people make when purchasing machinery insurance, so you don’t do the same!
1. Taking the Cheapest Offer
Here’s a familiar scenario: you get a few quotes for your machinery insurance, compare them, and take the cheapest. That’s how you get the best deal, right? Wrong! Never simply choose the lowest cost as it may not be the best policy.
Insurance policies differ between providers in many ways, so you want the one that gives you the best level of cover and value for money. If you want to learn more about insurance policies and the clauses within that link is worth reading and leading us to the next point.
2. Not Checking the Small Print
Every example of insurance in the USA will involve the dreaded ‘small print.’ The detail at the back of the policy outlines what is included and what is not. You simply must read it. It’s boring, it’s often confusing, but if you sign and ignore it, you may be making a big and expensive mistake.
It’s easy to be tempted by a policy that appears to cover everything, yet when you come to the point you need to make a claim, it has exclusion clauses you didn’t know about. Read the small print before you choose a policy.
3. Undervaluing the Machinery Insured
How much is the machinery you are insuring worth? Do you know, or are you willing to just guess for the sake of insurance? Don’t do it! Get an assessor to put an accurate value on your equipment, or you may find that the policy you choose does not enable you to replace it if damaged or stolen. It may cost a little to value it, but we strongly advise it as a sensible investment.
4. Ignoring the Excess
Each policy will come with excess fees that vary between policies. What are these? they are a way of getting the cost of your policy down and are used in all types of insurance. Let us explain with a simple example: a car is insured for both theft and damage.
However, for a replacement windscreen – for example – there may be an excess charge. This is the amount the policyholder agrees to pay in the event of a broken windscreen. Excess can also be applied to accidents and theft. The higher the excess you agree to, the lower the cost of the policy. We advise it is best to pay as little excess as possible and a higher rate for the policy itself.
5. Not Using a Broker
Our final point is that you should always talk to an insurance broker. Your machinery supplier may offer their insurance package. This is worth checking out, but a broker will have access to more options and give you a greater choice. Take the quote from your supplier to the broker and let them check through it. They will then compare it with like for like deals with other insurance providers and find you the best deal in terms of cover and value for money.
We hope this article helps you avoid the five mistakes above and saves you money.