Plant All Risk – The Various ways to Insure an Item of Plant

The schedule when a client Elects to Insure on this basis will reflect the clients New Replacement Value, that is the Value of the Plant item if it was Purchased today. Even if his machine was a 2007 model, the schedule would reflect the 2011 model Price. If the client then suffers a partial loss for example an accident, Insurers would pay to repair the machine with new parts, The client would only be responsible for excess. However if the client suffered a total loss or write-off, the Insurer would only pay for the machines current market value – for a machine in similar condition to the one he had I.E. similar hours and age. So even if the Item was Insured for R600,000.00 ,but a 2007 model with similar hours sells in the market today for R300,000.00 Insurers will only indemnify the Client for R300,000.00. 

Market Value Basis

If a client elects to Insure his Plant on a Market-Value Basis the schedule would reflect that years Market Value. In the event of a Total Loss the client would then receive a payout equal to the current Market Value of the machine in question.

In the event of a Partial Loss, Insurers would repair the machine with second hand Parts, if no second hand parts are available Client would have to pay the Difference between a new part and a second hand parts price had if existed I.E. the Plant item would be repaired with new parts but the Insured will have to pay the difference between the used parts if it was available and the new parts, by way of example the Plan item requires a new door , a door is R60,000.00 an a second hand door is R30,000.00, no part is available so in this instance the client would have to share the cost of the parts with the Insurer R30,000.00 each. 

Here the Insured and client agree to the value of the item, Insurers would however only look to insure a policy on an Agree Value Basis if the client can show value, that is for example, on an old machine, the client may have fitted a new body and engine and the plant item may have no Market Value or a Small Market Value of say R50,000.00, but by fitting Various Ways to Insure an Item of Plant 2 the other parts and engine, the machine is now worth R120,000.00, the Insurers would then Agree to Valuing the Plant item at R120,000.00. 

To ensure your vehicle is adequately covered without a substantial increase in premiums, consider adding Retail Value Top Up cover. Standard insurance policies may only provide coverage for the market or trade value of your car in case of a total loss. By opting for the Retail Value Top Up cover, you can bridge the gap between the market value and the higher retail value of your vehicle. This ensures that you receive a more appropriate payout in case of a total loss, without causing a significant impact on your premium costs.

In the event of a Total Loss, Insurers would then pay out the Agreed Value of R120, 000.00 less any applicable excess.

In the event of a Partial Loss, Indemnification would apply on exactly the same basis as it does for Market Value.

Trust this gives some basic insight into the various options available to clients when it comes to Insuring their Plant Items.