Top 10 (Okay, 11) Reasons You Need Rental Equipment Protection

Rental Equipment Protection™ (REP) is physical damage coverage while equipment is out on rent. This post is the first of a two-part series that details several of the best reasons for choosing REP over other damage coverages available.

1 – Increases rental profit.

We’ll just come out and say it: Rental Equipment Protection™ (REP) from J.T. Bates Insurance Group improves profitability for rental businesses. It does this in two ways. First, it provides an add-on sale for the rental company. When REP is sold with an equipment rental transaction, a portion of the fee paid for REP pays for the program. This portion is also tax-deductible. The rest of the fee goes to the dealership’s bottom line. Second, REP improves profitability by eliminating risk. More on that later.


2 – Provides replacement cost.

Replacement cost is a much better option than actual cash value. Providing replacement cost means REP will pay the dealership money to replace the equipment that was damaged beyond repair (provided the equipment is less than five years old).

In contrast, actual cash value means market value of the equipment, and is calculated by subtracting depreciation from replacement cost (Original cost – Depreciation = Actual Cash Value).


3 – If you already self-insure, REP eliminates risk, not profit.

With REP, there is no need for equipment dealers to reserve funds in order to pay for claims. REP reimburses for claims while enhancing profitability for the equipment dealer. In many cases, offering a comprehensive program like REP increases customer participation, which in turn increases revenue.


4 – Claims will not affect business insurance premiums.

Rental customer claims are not covered by the dealer’s business insurance policy, so with REP there is no risk that business insurance premiums will increase due to a loss or a claim. With REP, risk is transferred to a secondary policy, and claims are handled quickly with no headaches. This is a benefit to your customer as well since the program has a waiver of subrogation clause which means we won’t go after your customer’s insurance company to repay the loss.


5 – All risk coverage reduces risk for rental business better than named perils.

Named perils means only the type of damage specifically listed in the coverage is paid for by the insurance company. Typically, this does not include common losses like overturns or collisions and as a result is quite limited.

With REP, equipment dealers enjoy all risk coverage. This means that unless a loss is specifically listed as an exclusion to the policy, the dealer will be paid for damages.


Check back next week for the sequel to this blog post, Top 10 (Okay, 11) reasons you need Rental Equipment Protection (Part 2).


For more information or to obtain a free, no-obligation quote for Rental Equipment Protection, contact us here or call 877-900-8729.