If you lease or finance equipment or commercial vehicles, you have a real opportunity to provide a value-added service to your small business customers through a professional lease insurance program.
A lease insurance program requires no effort on the part of your sales force, but actually speeds deals by eliminating the need to pursue insurance documentation. It also provides marketable advantages your sales force can use to differentiate your offering and help close deals. Here are four main benefits to lessees:
1. Replacement cost coverage.
The coverage lessees can obtain through a typical business owner policy (BOP) provides reimbursement of actual cash value (ACV) for an equipment loss. ACV is defined as replacement cost minus depreciation – which means the lessee needs to make up the difference. In contrast, a customized lease insurance policy will provide for the replacement of equipment or the lease balance paid off in full when there is a total loss. (For vehicles, the balance of the lease is paid off.)
2. Extra protection without extra charges.
Lease insurance covers more causes of loss than standard BOP coverage, too. For example, BOP coverage for theft typically excludes cases when there are no visible signs of illegal entry or exit, such as when employees or contractors with access to the lessee’s premises have stolen leased equipment. Illegal taking of leased equipment is included under lessor-provided lease insurance policies. Lease insurance policies also provide coverage for flood losses (available by endorsement to a BOP, for additional premium) and power surge (not available with a BOP, even with extra premium).
3. Fixed, affordable cost, and no deductible.
One of the most appealing features to lessees of a lessor-provided lease insurance program is that costs are predictable. Program insurance charges on leased or financed equipment or vehicles are competitive, and fixed for the entire term of the lease. Customers don’t have to worry about renewing their coverage, or how much premiums might skyrocket each year. There’s also no deductible – unlike standard business owner policies, which typically have deductibles of $500 or more. Your lessee customers will be reassuring knowing that their monthly insurance charge covers it all.
4. Convenience and peace of mind.
It couldn’t be any easier for your customers to take advantage of the lease insurance program you offer. Unless they choose to arrange alternate coverage, the lease insurance program policy automatically covers the equipment or vehicles they lease or finance through you. Thanks to an automated data exchange, insurance charges are billed right on your periodic lease or finance invoices. There are no additional bills to pay, or worrying about coverage that lapses before the contract ends.
A well-designed lease insurance program can provide lessees with superior coverage at lower rates than coverage they can arrange through a typical business owner’s policy. It’s convenient coverage that protects the equipment and helps to keep your customers operating after a loss. That works for all of you.
Interested in learning more? Please contact us.