A customer went into his local rental store and needed a compact track loader to complete some work at a job site. The compact track loader was rented to the customer and loaded onto his trailer. The customer returned the equipment the next day and it was covered in mud. The rental store manager asked the customer about the rental. The customer said the machine had gotten stuck in some muddy water and stopped running. The rental store could not get the engine to turn over and took the loader to a local repair shop for inspection.

The repair shop started to take apart the engine and found mud and water inside almost every part. The engine was ruined and the customer refused to pay for a replacement engine. The rental store turned in a claim to its insurance carrier, who investigated the loss. The customer had all but submerged the compact track loader in very muddy water while it was running and had locked up the engine. A new engine was paid for by the rental store’s insurance policy, minus the store’s deductible.

The rental store’s insurance company is pursuing the customer for the cost of the new engine and the store’s deductible.

This item, provided by ARA Insurance Services, Kansas City, Mo., is the story of a real-life insurance claim involving a rental store and is intended to help readers better understand and manage risk. For more safety and risk management information, customers of ARA Insurance Services can log on to ReSource. Access is free, so if you haven’t signed up yet, contact your agent or call 800-821-6580.