Protect Rental Equipment and Make Renting Easier
For many heavy equipment dealerships, rentals are an important revenue stream. Protecting your rental fleet is crucial, but once a machine heads off property with a customer (or you drop it off at their jobsite), how can you keep the protection going? Your business insurance does not cover equipment that’s out on rental. Or, it might, with a special endorsement and extra fee.
Insurance companies like predictability
So it’s not surprising that most insurance companies aren’t excited to cover equipment that is not directly under your control. Who knows what might happen? Certainly, some of your customers will treat equipment they rent from you as if it were their own. But others will not. Will the person operating the machine be fully trained and experienced enough to do the work within recommended parameters? Will the machine be subjected to questionable conditions that could cause damage?
Theoretically, at least, your rental equipment presents a higher risk of damage and resulting insurance claims. Claims drive up premiums.
The perfect solution? Loss damage waivers
A loss damage waiver, sometimes called rental equipment protection, are a simple solution for dealerships to protect rental equipment when it’s on the move. In effect, an LDW gives your rental customer access to your dealership’s insurance policy. You agree not to go after them if your equipment is damaged or destroyed while in their possession. In return, they pay a fee for that privilege.
LDWs are more convenient for everyone. Customers don’t have to waste time getting a certificate of insurance from their own company, and your rental crew doesn’t have to worry about collecting and double-checking that paperwork. They can focus on assisting rental customers instead. LDWs boost your revenue stream, too. You can charge whatever fee you want for each waiver, based on what the market will bear, of course.
Everyone’s a winner.
And while equipment protection is your #1 priority, keep in mind that customer convenience is a tremendous selling point. If folks can get the rental they need faster and easier, you can be sure they’ll call you first.
You don’t need an insurance license to sell LDWs
Because you are selling only access to your own insurance, it is not necessary to have an insurance license to provide loss damage waivers to your customers. If you were to offer short term physical damage insurance, that would require a license.
But you do need a savvy insurance company
Anyone who is properly licensed can sell you insurance, right? But insurance not only protects your business assets, it can be an asset in itself. For instance, did you even realize your dealership could offer loss damage waivers to rental customers? Yet, look at the benefits you (and your customers) have been missing.
You need more than a sales office, you need an advisor. An insurance partner that understands how your construction equipment dealership works is the best advisor because they get it. They get the challenges you face, and they get what your customers are up against out on the job as well as back home in the office. It’s tough to be in the construction business, or any business that relies on heavy equipment.
Here at ADI Agency, we know all about that. We are experienced insurance advisors, but we also have hands-on experience in dealership management. That’s how we can see behind the scenes to know what you need and help you read between the lines to be sure you’re taking advantage of all the best insurance options. When you get better protection and can earn more revenue, your dealership can be more profitable.
Here at ADI, we offer a variety of products that can help your dealership be more customer-focused and more profitable. Interested? Let’s talk.