Landscape Insurance (has nothing to do with insurance companies!)

Discussion in 'Landscape Architecture and Design' started by fitzg2md, Sep 4, 2007.

  1. fitzg2md

    fitzg2md LawnSite Member
    Posts: 156

    Tossing some ideas around in my head. Anyone ever offered any type of "landscaping insurance" to their clients? You know, like you install a line of small trees and offer a 1 year warranty (or not). however for x amount per month or year you will offer an extended warranty. Some research would need to be done so as not to burn yourself. If you can sell it right and price correctly it could work. Could also get you into trouble if you dont charge correctly, warrant bad installs, or dont be specific with regaurd to weather. Thoughts?
     
  2. Woodland

    Woodland LawnSite Member
    from Maine
    Posts: 207

    It's called a maintenance contract.
     
  3. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I don't really need to offer insurance to our customers. We just charge enough on the initial install that we can afford to offer a 5 year warranty on all of the plants and trees we install.

    I think this kind of idea works for cars and electronics.....for plants, not so much.
     
  4. fitzg2md

    fitzg2md LawnSite Member
    Posts: 156

    well what got me thinking is that insurance co. will insure just about anything. One of the thing they offer is tree insurance...if your 60 year old tree dies, they pay to have it taken down and replaced (with a new smaller tree). Obviously insuring a bed full of annuals would be silly. I guess some could call it an "extended warranty" instead of insurance. Instead of just 5 years of warranty on their retaining wall, for x amount of money (either all at once, or monthly, yearly, etc) you will extend the warranty to 10, 15, 20 etc years.

    Also, most plant warrantys seem to be for a year and dont cover things like plant death due to neglect, drought, insect damage and whatnot. For x amount more (again, either upfront or in some type of installment) you will extend the warranty to cover everything.

    I do think it will take alot of research to charge the correct amount and make money off it while still being seen as valuable to the customer. Kinda like a extension of their homeowners insurance. Anyone else have thoughts, or does everyone think this is a stupid idea? -Mike
     
  5. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,837

    I will not call it stupid. But I will call it totally impractical an foolish. My prices as they stand already include a year warranty and is honored If my instructions for care are followed. My already inflated prices cover the replacement cost for every plant planted, in the event of failure, SO I AM ALREADY COVERED. And this rolls into the job profit because in almost all my installs their is 0 failure because they are done properly. So now with your idea I NEED to try to get them to accept my already expensive price plus the need for the additional cost of the insurance because my work sucks and you need to insure my work against failure. F-THAT..........

    I would feel like a total snot dripping fool bringing up the "you need insurance" chat.....We are the entities that require insurance not them. BUT their are the guys that will not agree with me so this is just my 2 cents.
     
  6. Woodland

    Woodland LawnSite Member
    from Maine
    Posts: 207

    My warantee/guarantee is that the plants are healthy when I plant them and that I planted them properly. If they fail for any other reason it is becuase the homeowner did not do follow up care appropriately - hence my maintenance contract comment - or they succumb to a pest that attacked after they were planted and I don't see any reason why I should/would take a hit for that since I have no control over it.
     
  7. Smallaxe

    Smallaxe LawnSite Fanatic
    Posts: 10,082

    Inurance companies do not make money on premiums. One of my clients explained that they operate and a loss from premium to payout. Payout is $105.00 for every $100.00 in premiums.
    They make their money in the investments. Handling large sums over long periods is how they survive. The gov't is always there to boost their bottom line for things like Katrina.
     
  8. fitzg2md

    fitzg2md LawnSite Member
    Posts: 156

    I feel like I maynot be explaining myself correctly. My price covers the warranty on the install for one year (plants) also. I have marked up my price to account for replacement like everyone else. However, as an add-on that is completely optional, customers can choose to pay x amount more and extend the warranty.

    And this extended warranty would cover the install no matter what happened. Kind of like when you buy a new tv at best buy...comes with a 1 year warranty, but for 100 extra bucks or whatever you can extend the warranty to 3 years. And this new warranty covers it from any damage...not nessessarily defects in the manufacturing. If you spill a cup of water on the tv..still covered.

    You are not offering a warranty because you say that your installation and materials were shoddy, but because crap happens. If anything, you are more willing to stand by your product. For extra cash of course. However, you are offering more peace of mind than they would otherwise have...thats what they are paying for.
     
  9. Harley-D

    Harley-D LawnSite Senior Member
    Posts: 508

    Wow. Tough one. See both sides though.

    If sold right, could make additional money. But does need to be worded right and carefully approached. My question is: Would you have the insurance you offer on the plants or hardscape cover things like comprehensive and liability?

    If billy backs over a $350 jap maple while learning how to drive dad's s-class, is that covered? What about 2 years after planting and drought and jap beets kill 6 of the 10 3.5in cal. cherry's? And if bagworm don't kill but make the leyland's look like crap because the customer didn't opt to have them sprayed back in april?
    Most people are stupid and will pass it up i believe. And when you use the examples to try and sell the insurance, you scare them. Works with car insurance, but that's because you don't buy the insurance from the same people that sell you the car. Great question and i hope i added something to the issue.
     
  10. Woodland

    Woodland LawnSite Member
    from Maine
    Posts: 207

    Okay, I get what your saying now. And I would have to agree with Harley. I think there are way to many variables involved for this to be a viable offering. Would you cover the plant if it dies due to neglect? Auto/home insurance companies don't cover maintenance issues, i.e. they wont cut down a dead tree in your yard but will fix your roof when the tree falls. If a customer doesn't water a plant in year 3 of their extended warantee, will they get it replaced? And, like insurance companies, will you raise their premium if they make a claim against a plant?

    I'd be willing to bet that once you put some more thought into this and research it a bit more, you'll find that you wouldn't be able to raise enough money in premiums to cover your aggrevation in administrating the policies, let alone actually replacing plants that croak.
     

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