No one needs to tell contractors that accidents happen. There’s a reason why completing safety reports is required daily, and safety meetings (sometimes monthly) occur regularly. And unfortunately, the construction industry continues to see a shortage of experienced equipment operators. A dangerous work environment, combined with poor or inexperienced operators, often leads to damaged equipment.
Therefore, when faced with the “rent or buy situation,” contractors should ask themselves, “What’s my plan when this piece of equipment gets damaged?”
Insurance – Most dealerships will require renters to have insurance before renting. Some dealerships offer rental protection-often called a damage waiver. Depending on the specific coverages provided under the damage waiver, the customer might not have to pay anything except their deductible. However, not all damage waivers are created equal (Read the article here). Renting equipment might not solve all your insurance woes, but a good damage waiver can solve a lot of problems.
Fewer Project Delays – If we follow the “bouncing ball,” renting also means that renters don’t need to use their resources or waste time trying to find a mechanic to fix the damaged equipment. After paying their deductible, renters can just rent another piece of equipment. This in turn means that project delays are minimized.
Equipment Selection – Our claims data shows that some accidents happen because operators are using the wrong piece of equipment for the job. Sometimes this is because the proper machine is not available. If contractors only own equipment, they are limited by their own inventory. Dealerships and Rental Houses offer a wide array of equipment so that the proper equipment is used for each situation. Thus, using the right equipment should mitigate your risk of accidental damage.
Insurance – Each customer’s situation is different, and their situation gets infinitely muddier when a customer chooses to buy equipment. Among other factors to consider, a business must evaluate its insurance policy. That policy will determine what protections the equipment has. A good insurance policy will protect the equipment in the event of damage, but unfortunately, it will be subject to potential rate increases. A poor insurance policy could leave you subject to paying for the damage yourself.
Lack of Qualified Mechanics and Part – When we remove the insurance aspect for one moment, another problem arises. The equipment still needs repairs. Regardless of who pays for the repairs, equipment owners find a qualified mechanic (internal or external) to fix the machine. As we all know, there is not only a need for qualified equipment operators, as previously discussed but also qualified mechanics.
Additionally, sourcing parts to repair machines is difficult. The supply chain as it stands today makes finding and shipping parts highly challenging. If a contractor is able to find a part, it could be stuck in a port waiting for the proper transportation to deliver it. Therefore, when making the “rent or buy decision,” one must ask themselves if they can coordinate the repairs themselves.
Waiting for Repairs – Let’s say that a contractor has an excellent insurance policy that covers the damages completely. And once more, has a qualified mechanic readily available to fix the machine. What happens next? Progress on the job can’t stop. Most contractors face the decision to either replace the damaged machine with another piece of equipment they own or rent a machine until the repairs are completed. This process wastes valuable time the contracts can’t spare.
Of course, there are benefits to buying equipment. No monthly payments, adding an asset to the balance sheet, and having immediate access to equipment are definite advantages. However, it’s difficult to ignore the perks of renting, especially in this wildly unpredictable economy.
If you’d like to get more information about renting equipment or insurance in the equipment industry, contact us at email@example.com or call us at 877.595.7850