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Understanding the Various Coverages

Broadly there are two (2) types of extended warranty for construction equipment available.

The first type of extended warranty is offered by the heavy equipment manufacturer (OEM). Typically they extend the standard OEM warranty for a chosen length of time (usually in months or years) but with a limitation of usage hours (1,000, 3,000 or 5,000). The extended OEM warranty allows the equipment buyer to take their equipment to an OEM’s dealership for service, parts and repair once the standard warranty has expired (this is usually the dealer which sold the piece of equipment though may vary depending on where the equipment is at the time of failure). Depending on the size of the heavy equipment manufacturer, they may take the risk themselves or pass the risk off to an insurance company.

The second type of extended warranty is offered through construction equipment dealerships, properly referred to as an extended service contract, as opposed to an OEM program. Typically, these dealerships will have an insurer working behind the scenes with them. Like the OEM extended options, there are choices of length of time and hours. Where a dealership may differ is that they may offer a little more flexibility in their coverage. Like the OEM, they can turn their parts and service repair work on units sold into a fixed expense however, a dealership will set its program up to be reimbursed from the policy on what their parts and labour rates are, as opposed to being reimbursed net for parts or based on OEM determined labour rates.   

Which Construction Equipment Warranty Should I Purchase?

Meeting Expectations

Let’s face it, buying a piece of construction equipment in this day and age is quite expensive, and what is even more expensive is having downtime if something happens to that piece of equipment. That is why it is important to protect your investment and stop worrying about unpredictable machine-repair expenses.

Construction equipment extended warranties have been called “health insurance for the engine”. You pay money up front to avoid paying considerably more money at the time of the repair. As with most things in life, you get what you pay for, and sometimes paying less means not getting the coverage you need. In the world of construction equipment there are typically three different coverages to choose from:


Making Notes


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