What affects the cost of contractors equipment insurance
Contractors equipment is rated mainly on the total value you insure, multiplied by a rate that reflects how likely a loss is. Everything an underwriter asks is aimed at that rate.
The biggest factors
- Total insured value: scheduled equipment, blanket limit and rented equipment limit
- Type of work: road building, demolition and land clearing rate higher than finish trades
- Type of equipment: cranes and machines that work near water or underground carry more risk
- Deductible: a higher deductible lowers the rate
- Valuation: replacement cost costs more than actual cash value
- Loss history over the past three to five years
Apply online
The online application asks the questions underwriters need for this coverage. Business owners fill it out directly, and insurance agents can complete it for a client or send it to them. Insurance agents can also request an appointment.
Theft controls that help
- A fenced, lit and locked storage yard
- GPS tracking on high-value machines
- Immobilizers, ignition locks and removed keys
- Equipment identification marks and a current serial number list
Ways to keep the premium in line
Insure each machine for what it would cost to replace, not what you paid ten years ago, but do not leave machines on the schedule after you sell them. Review the schedule at every renewal. Raising the deductible on older machines while keeping a low deductible on newer ones is another common approach.
Choices that change the premium and the claim
Some decisions lower the premium today and cost you at claim time. Weigh both sides before you pick.
Deductible
A higher deductible lowers the premium, but it applies to each loss. If you have several small theft claims a year, a high deductible can mean you pay most of them yourself.
Valuation
Actual cash value costs less than replacement cost because the policy pays less on older machines. That works when you would replace a lost machine with a used one, and hurts when you would have to buy new.
Coinsurance
Many equipment policies carry a coinsurance clause. If the values you report are well below what the equipment is worth, the policy can reduce a partial claim in proportion. Under-reporting values to save premium can cost more than it saves.
How to get an accurate quote
- Build a current equipment schedule with year, make, model, serial number and replacement value for each major machine.
- Total the value of tools, attachments and small equipment for the blanket limit.
- Estimate the highest-value machine you rent from others and how much rented equipment could be on site at once.
- Describe your work type and where equipment is used, including any work near water, underground or at height.
- List your theft controls: yard fencing, lighting, GPS, immobilizers and key control.
- Gather five years of loss runs from your current or prior insurance, or note that you have had no losses.
Common questions
Can you give me a price range?
We do not publish sample prices. Premiums depend on the values, work, deductible and loss history above, and two contractors with the same equipment can see very different rates. The application collects what an underwriter needs to price your account.
Is there a minimum premium?
Most carriers have a minimum premium for this class, so small schedules often cost the minimum. Adding tools and rented equipment to the same policy can make that minimum work harder for you.
Will GPS tracking lower my premium?
It can help, depending on the carrier. Some underwriters give credit for GPS and immobilizers on high-value machines, and many look more favorably on a theft-prone account that has them.
Why did my premium go up when my equipment did not change?
Common reasons include a recent loss, a change in the type of work you do, higher replacement values for the same machines, or a carrier changing its rates for the class. Ask for the rating breakdown at renewal so you can see which factor moved.
Need a contractor license bond?
Many states and cities require a contractor license bond before you can get licensed or pull permits. Find the bond your state requires.
Ready for a quote?
One online application. Owners and agents both welcome.
Start the contractors equipment applicationRelated coverage
Owned Equipment
Scheduled or blanket coverage for the machines and attachments you own or finance.
Coverage & applicationEquipment Floater
Covers mobile equipment wherever it goes: the yard, the trailer, and every job site in between.
Coverage & applicationEquipment Rented From Others
Covers machines you rent or lease for a job, so a rental contract loss doesn't come out of pocket.
Coverage & applicationContractors Tools
Hand and power tools on the truck, in the gang box, and at the job site.
Coverage & application