Is your farm policy up to date?

Farming Combined Insurance - is your policy up to date?

From fertiliser to fuel and animal feed, costs for farmers are rapidly increasing. And as living costs spike and prices of building materials soar, it is time to reassess your existing farm insurance policy. 

It is important for anyone working in farming and agriculture to check their sums and avoid being underinsured. With inflation at a high, those in the sector must also consider the true value of their produce in today's market. The increased cost of beef and lamb, as well as milk and cereals, means your existing cover may not be adequate. 

What's covered?

Our farming combined insurance covers everything from your farm buildings, machinery and tools to livestock and your household.1 
You can also protect the value of your goods in transit and any interruption to the business. However, it is up to policyholders to ensure they have the right level of cover within their current policy.2

Concerns for farmers – what to consider

The sharp rise in living costs is a huge concern for farmers across the UK. 
Food prices propelled inflation to a 40-year high, with the most significant increases seen in the cost of bread, cereals, and meat.3 Soaring transport costs also contributed to the rise in inflation, as well as Brexit, the coronavirus pandemic, and the invasion of Ukraine.

Inflation hit a high

UK inflation reached 9.1 per cent in May this year, according to figures from the Office for National Statistics (ONS).4 
Given the escalating costs, there has never been a better time to speak to your broker about your farming combined insurance. Don't wait for renewal to reassess your sums insured.5

Cost of building materials 

The construction industry continues to battle surging prices. 

According to the Department for Business, Energy and Industrial Strategy (BEIS), annual material price inflation increased by more than 24% in March 2022 for several materials.6
Consider the impact of these cost increases if you had to replace farm buildings following an incident such as a storm or fire.7 As well as these price increases, the growing demand for materials, labour shortage, and lengthening lead times could all result in delays in finding a builder or getting a quotation. 

Rising fuel and fertiliser prices

Agricultural businesses have also had to consider the soaring prices for petrol and diesel, adding to the pressures on farmers. 
Fertiliser and animal feed prices have risen year-on-year, and the average price of petrol increased to 191.43p a litre and diesel at 199.05p in June, according to motoring company RAC.8 Don't find yourself in a situation where you're under-insured, running the risk of being subject to average being applied, resulting in a reduced payout.
  

Making sure key areas are protected

Now is the time to review your existing policy. Taking just a short time to ensure your cover is sufficient will give you peace of mind. 

Ensure you have an accurate idea of the cost of replacing buildings, fertiliser, fuel and feed based on the current market value. And, as both fuel and fertiliser become more valuable, the risk of theft also becomes something to consider when reassessing your policy.

Our farm insurance experts are here to discuss your agriculture business insurance needs. We can help make sure your cover is right for you, leaving you to concentrate on running your business.

Sources:

  1. www.marshcommercial.co.uk/farm-combined/
  2. www.marshcommercial.co.uk/rising-building-costs-and-underinsurance-risk/
  3. www.theguardian.com/uk-inflation-rises-to-91-its-highest-rate-in-40-years
  4. https://www.ons.gov.uk/economy/inflationandpriceindices
  5. www.marshcommercial.co.uk/high-inflation-and-the-risk-of-underinsurance/
  6. www.homebuilding.co.uk/construction-materials-shortage
  7. www.marshcommercial.co.uk/rebuild-cost-assessment/
  8. www.rac.co.uk/cost-of-filling-up-rises-9-in-june-as-petrol-jumps-by-monthly-record-of-nea/

Other sources:

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