You have poured countless hours and money into your food trailer or food truck so you want to make sure your investment is protected right?
Our first question is going to be what is the value you want it insured for? ...crickets
In order to determine what you should insure your food trailer or truck for you need to know a little insurance lingo.
Insurance companies pay property claims two main ways.
1) Actual cash value (ACV) covers your property at the current market value. Meaning what is the property worth today taking into consideration the age, condition, and useful life left. This is how most insurance companies cover vehicles, trailers and equipment.
2) Replacement cost (RC) covers your property to buy brand new like kind and quality regardless of age and condition. This coverage is typically only offered on buidings and their contents.
Now that you understand insurance companies value food truck and trailer property at actual cash value we have a target in mind.
Here is a formula to get you closer.
What did you pay for the trailer or truck + What you put in after you bought it (Labor and Parts) = The value.
I know you are saying right about now I did most the work! However, you do need add this "labor cost" into the calculation.
Ross of Ross RV and Food Carts has also offered to help if you want to discuss with him.
Now is not the time to round down on the value of your truck or trailer, because insurance companies require to insure to value or you can be subject to coinsurance penalties come claim time.
For example if your trailer is valued at 35K, but you insured for 20K. The insurance company will only pay 57% of the claim, because you only insured 57% of the value. Ouch!
The reason insurance companies take insuring to value so serious is without this constant their is no way to properly rate insurance cost.