Do you know what you should insure?

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Have you got enough cover if you need to claim?

Over the last few weeks we have seen an increasing number of claims which have been under insured. We thought it would be wise to give our farmers some extra advice and support to avoid this happening in the future.

Motor – Due to Brexit and the strength of the pound falling, agricultural vehicle prices have increased, some values have even doubled. Second hand agricultural vehicles are becoming increasingly hard to get hold of and this has resulted in a price increase for these vehicles. 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 dealer local to you and ask them for a current value on your vehicle and then adjust your insurance accordingly. 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.

Bear in mind how are you going to fund the deficit between your old vehicle and the price to purchase a new/second hand one.

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

Farm Insurance – the main short fall on farm cover is in respect of livestock. Your schedule of insurance should be reviewed at least once a year at renewal and values of livestock should be checked. If you purchase livestock throughout the year it is advisable to again check the total amount you have insured.

If on a claim you are under insured the application of ‘Average’ could be applied to your claim. ‘Average’ is where a proportional reduction is applied in settlement of a claim.

For example livestock insured for £750 but actually costs £1000 to replace means that you have only insured for 75% of what it should be. Any claim pay-out would be settled on a 75% basis, which could result in a financial loss for the farmer.

On a worst case scenario under insurance could be deemed as willfull or deliberate to keep the insurance premium low and the policy may be considered ‘null and void’ and a claim could be refused.

Also look at your farm property, both farm buildings and domestic houses, have a look at what they are insured for and how much it would cost to repair or replace them, again under insurance could cause serious financial loss to the farmer.

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

Public Liability – a lot of insurance companies recommend that you have a sum insured of £10 million or a minimum of £5 million to deal with any possible claims. Aviva have said that up to 90% of customers are under insured on their property insurance claims.

We know that you are very busy people and need to be working in your business and for some this might be a minefield but don’t worry we have a great deal of experience in this area and we are more than willing to help you with this.

If you would like further help on deciding whether you are under insured please give our office a call on 01332 362367 and one of our qualified team will be more than willing to help you with this.