Farm News
Beware of under insurance
Do you know what you should insure ?
Have you got enough cover if you need to claim ?
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DURING THE LAST FEW WEEKS , Belmont Regency Ltd reports an increasing number of claims which have been under insured , so the company offers farmers some extra advice and support to avoid this happening in the future .
MOTOR
As a result of the difficult Brexit negotiations and the strength of the pound falling , agricultural vehicle prices have increased , with some values even doubling . 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 that times are hard for many 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 which 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 clearly could result in a financial loss for the farmer .
On a worst case scenario under insurance could be deemed as wilfull or deliberate to keep the insurance premium low and the policy may be considered ‘ null and void ’ and a claim could be refused .
Also we advise you to take a close look at your farm property , both farm buildings and domestic houses , check carefully what they are insured for and how much it would cost to repair or replace them , because again , under insurance could cause serious financial loss to you .
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
Many 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 has 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 this is our business and we have a great deal of experience in this area so we are more than willing to help you .
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 assist .
10 Oct / Nov 2017 www . farmers-mart . co . uk