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Farmers - here's how to make sure you have the insurance you need...

With farmers only finding their assets may be underinsured once they go to make a claim, Belmont Regency’s Becky Kooner offers advice on how to make sure farmers have the insurance they need.



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Farmers - here's how to make sure you have the insurance you need...

With values of agricultural vehicles rising due to the fall in sterling, many farmers may find they are underinsured if they go to make a claim on their insurance.

 

And being underinsured could cause problems if a farmer needs to make a claim and could affect the amount an insurer would pay out, according to Belmont Regency claims manager Becky Kooner.


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She said: “We know times are hard for farmers and you want to keep your costs down, but there is no point insuring a vehicle at a lower price and a lower premium, if when you claim you are unable to replace the vehicle for one of a similar value.”

 

She urged farmers to check all aspects of their farm insurance and understand what should be covered.

 

“In a worst case scenario, underinsurance could be deemed as wilful or deliberate to keep the insurance premium low and the policy may be considered ‘null and void’ and a claim could be refused.”

Machinery

Machinery

 

Due to the fall in value of the pound, agricultural vehicle prices have increased, with some as much as doubling.

 

With secondhand vehicles become increasingly hard to source, prices have been rising.

 

Ms Kooner said: “We urge all of you who have agricultural vehicles to check your insurance documents and look at the values you have on these vehicles at the moment.

 

“Ring a local dealer and ask for a current value on your vehicle, then adjust your insurance accordingly.”

 

Farmers also needed to bear in mind how they would fund the deficit between the old vehicle and the price to purchase a replacement.

 

She added: “Your insurance company will not pay out more than what you have insured the vehicle for, even if current market value is more at the time of the claim.”

Public liability

 

Ms Kooner said a lot of insurance companies recommended having a sum insured of £10 million, or a minimum of £5m, so it was worth checking the amount covered in case the farm needed to deal with any possible claims.

FI

Farm Insurance

 

For farm insurance, the main shortfall was on livestock. Ms Kooner advised insurance should be reviewed at least once a year, with the value of livestock insured checked when purchased.

 

For those underinsured, ‘average’ could be applied to the claim where a proportional reduction is applied.

 

She said: “For example, livestock insured for £750, but actually costs £1000 to replace, means you have only insured for 75 per cent of what it should be.

 

“Any claim pay-out would be settled on a 75 per cent basis, which could result in a financial loss for the farmer.”

 

She also urged farmers to check their farm property insurance and understand how much it would cost to repair or replace properties.

 

“We have recently been advised of a case where a farmhouse which was insured for £265,000 suffered damage and it came to light the rebuild cost was £900,000.”

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