The Concerns Around Farm Underinsurance
The rate of inflation in the UK has recently risen steeply to 4.1%. Now is an important time to verify whether your property is insured for the correct rebuild values, should the worst happen.
Insurance Should be Aligned to Rebuild Costs
The cost of timber has doubled in the past year and general building costs are increasing day by day. Insurance policies taken out before and during COVID are likely to no longer satisfy the rebuild value of your home, estate or farm buildings. You might be alarmed to find out you cannot cover costs, should anything happen to your property. Now is the time to review your sums insured and establish whether you need to adjust your farming insurance cover.
Verify that your Policy Still Complies
Whilst most polices will have an index built in to automatically increase the sum insured on various items as interest rates change, including buildings and contents, it is important to verify that your policy has not fallen outside of acceptable parameters, as a result of the unusual circumstances caused by the pandemic. No matter when your farming insurance is due, it is pertinent to review the terms and conditions of your insurance policy and contact your broker if you feel that the cover is not adequate.
Understanding Insured Loss Adjustment
If the worst were to happen, such as a fire destroying your farm buildings, a loss adjustor would calculate the total rebuild cost of your properties. This determines whether the amount insured is adequate to replace the entirety lost. If this figure is deemed to be too low, then only partial compensation may be offered. For example, if your total farm buildings are currently insured for £1m and following the claim and investigations the cost to rebuild is actually £2m, you will be deemed as underinsured by 50%. This resulting pay-out would only be half of the actual necessary requirement to rebuild the property.
Speak to your Insurance Specialists
At Farm and General, we understand the concerns our clients have around the situation outlined above. We are farm insurance specialists and have experts on hand to talk through the options available. Although we cannot advise on the cost of rebuilding, we are happy to discuss the cover available to you to enable you to make the best choice for your specific circumstances. Talk to Farm and General today.