Insurance is a necessary expense on all farms. While recognising the need for insurance, there has been a drive by some farmers to cut insurance costs in their farm business over the last number of years.

This is mainly arising as a result of fluctuating farm incomes across all sectors. At the same time, insurance premiums have been creeping up, particularly for private vehicles and machinery.

However, reducing farm insurance costs can be a short-term saving. It’s not simply about cutting farm expenses by reducing your insurance cost but more about getting the right insurance to cover all your needs – private and business.

Safety net

The real benefit of farm insurance is the safety net of being fully covered in the event of there being a claim. Recent weather events such as Storm Emma and Storm Ophelia reinforce the need for farmers to have adequate insurance cover for their farms.

Therefore, if a farmer is looking at reducing the cost of farm insurance, he or she must ensure that they are still getting the best cover that they need for their own business.

Whether you are changing insurer or looking to reduce insurance costs, farmers must ensure they continue to get like-for-like cover.

Each farm is a separate business and the risks on each farm, while many commonalities will exist, can be very individual and unique. As a result, farmers would need to carry out a risk assessment on their own farm as to any particular insurance cover they need.

When carrying out a risk assessment on the business, farmers should be very mindful and never overlook health and safety standards. The best insurance is a policy you hopefully never have to use.

Insurance is individual but it is necessary and the comfort of being properly insured will be of great benefit to you. It will also be a benefit to financial institutions you may have borrowed money from based on the asset value of the farm.

It is important when choosing or changing insurance provider that you take time to assess exactly what each company is offering and to identify any differences between the policies.

Critical points to consider

  • Has the insurer experience of this type of business?
  • Has the insurer a proven track record in paying the types of claims associated with this portfolio of insurance?
  • Will the insurer provide a review service during the lifetime of the policy as part of any new business transaction?
  • Who do I contact to query my cover or complete an amendment on my policy?
  • Will there be administration fees to amend my policy and how much will these fees be?
  • How much is the excess on each farm insurance policy?

    • Conditions

    It is also important for farmers to consider the specific conditions that may be attached with different farm insurance policies. Some conditions to look out for include:

  • Check the conditions, exclusions and any endorsements on all policies if switching insurance provider. You may be happy to accept more restricted cover but you need to know what you’re getting. The concept for like-for-like rarely exists because all policy document wording varies from insurer to insurer.
  • Will my track record count? Tenure of custom and customer performance is reviewed by insurers. Depending on the insurance company, various factors may be taken into account on customer files where request for non-standard cover is sought or if the customer encounters difficult times.
  • Make sure to tell your insurer everything. Omitting certain information when completing application forms could later render your policy null and void.
  • Make sure to answer fully any questions on the new business qualifying proposal and declare all material facts to the insurer.
  • Am I guaranteed my previous insurer will requote me? Insurers underwriting criteria can change and generally is continuously reviewed, so you may not be able to return to your original insurer if you change your mind.