Farmers across the country could be at risk of being under-insured unless a careful review of policies is completed. Increasing repair costs due to challenges with the price and availability of materials, alongside the increasing value of farm equipment, machinery and buildings could mean that some existing policies are not adequately covering farmers’ needs.
Director of independent agricultural insurance brokers, Acres, Nigel Wellings, said that farmers are facing repair costs rises ‘of between 20-25%’ and, in come cases, the challenges being faced with sourcing parts means that some equipment and machinery items are being scrapped rather than repaired. He said: “The value of new and second-hand tractors has gone up massively, in some case appreciating by as much as 30-40%. A second-hand tractor insured at £35,000, could easily be valued at closer to £50,000 plus for a like for like replacement, with the same hours.”
Nigel Wellings
Premium increases
Many insurers have increased premiums following a turbulent year in the arable crop market – an action that hasn’t been seen very often over the past few years – and farmers need to be aware of the affect that this will have on policies. Mr Wellings said: “For example, a farm building valued at £100,000 three or four years ago would likely be closer to £150,000 today. To cover for this it would probably cost an extra £50 on top of the premium previously paid. With the premium rate increase, this would also add around a further £15 on top of that.”
Revisions to budgets and polices to ensure values are accurately represented is advised by Mr Wellings, he said: “Take off what you no longer need or use, but ensure you revise values to ensure sums insured cover for replacement or reinstatement costs.”
