Increasing costs of repairs due to price and availability of materials, coupled with continued appreciation of farm equipment, machinery and buildings, is leaving many farmers at risk of being under-insured unless they review their policies.

“Repair bills keep going up across the board, with everything from farm equipment, commercial vehicles and cars facing rises of between 20-25%, and the same applies to farm buildings and properties,” explained Nigel Wellings of independent agricultural insurance brokers, Acres.

Read more:

He added that the availability of replacement parts is also a growing problem, leading to an increase in farm, commercial and domestic vehicles being condemned to scrap rather than being repaired.

Furthermore, with the rising cost of farm machinery – new and second-hand tractor values have gone up by as much as 30-40% – and farmers could well be under insured.

“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,” said Mr Wellings.

It is not just machinery that has seen the cost of claims rise. The volatility of arable crop values over the last 12 months also shows how farmer prices can be out of kilter with examples of people being 50% down on arable crop values.

Hence, the majority of insurers have increased their premiums accordingly and farmers are therefore being urged to review policies and revise budgets to reflect replacement values.

“In the current climate, it is almost inevitable that premiums will increase, so it is essential that policies are reviewed.

“Individual farming practices and operations quickly evolve. Take off what you no longer need or use, but ensure you revise values to ensure sums insured cover for replacement or reinstatement costs,” he adds.

“Costs have gone up, because values have risen, but the insurers are also now increasing the premium rates and this should be budgeted for,” he says.

Latest News:

“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 add around a further £15 on top of that.

“By understanding the farming business, and getting a range of quotes, our team at Acres can make sure that you not only get a policy relevant for your situation, but also that you do not miss out on any potential savings.”