How much do I insure my leased copier for? Was a discussion I had with one of the sales rep in our office yesterday.
From time to time, we will field calls from the clients asking how much to insure the leased copier for. The client then needs to submit that information to their insurance agent in order to produce a rider for the leasing company.
Let me back up a moment. When a copier is leased, whether it's a dollar buy-out option or Fair Market Value, all of the leasing companies require insurance on their property in case of catastrophic loss. The client can either purchase the insurance from the leasing company and pay the monthly fee or call their insurance agent and have a rider for that copier with listing the leasing company listed as the loss payee.
Our discussion centered more about insurance with Fair Market Value (FMV) lease. We ran through a few options.
- Do you tell the client the invoiced price to the leasing company? or
- Do you tell the client that the amount is the stream of payments for the total dollar amount with the lease, "e.g." payments of $200 per month for 60 months equals $12,000? or
- Do you tell the client that the amount is the stream of payments (above) and the FMV purchase price?
After debate, we both agreed that none of the above options are the correct answers to give to the client. The right course of action would be to call the leasing company and get a quote that includes the stream of payments along with the FMV purchase option. Then deliver that document to the client.
Fire
In the last few years, I had the opportunity to help a client with a catastrophic loss due to fire. In that case the leasing company calculated the stream of payments along with the Fair Market Value purchase option.
Super Storm Sandy
When Super Storm Sandy struck here in NJ, we had a few claims due to copiers that went under water. Now, here's something we found after the storm in reference the leasing companies insurance offer.
The leasing companies insurance policy will cover flood damage.
With two other storm losses where the client had submitted a rider to the leasing company from their Business Policy, there was no protection for floods. This may vary from insurance company to insurance company. Thus, a lesson was learned.
In both cases the clients were able to claim the losses with FEMA.
Thus, even though the leasing companies insurance may cost a few more dollars, it's our belief that this is the best course of action when leasing a copier. If you're a rep reading this, we hope that you are having that insurance discussion with every client. If you're the lessee reading this for research we highly recommend using the insurance services of the lessor.
-=Good Selling=-
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