It is critical for farmers to review their insurance costs as all the factors involved in rebuilding have gone out of kilter, AXA Insurance agri business manager Christy Doherty has advised.
Doherty said that with timber prices likely to go back up, concrete increasing by over 35%, a labour scarcity and building contractors nervous of entering into contractual work due to indeterminate input prices, rebuild costs are likely to be much higher now than when policies were entered into and valuations established.
“When you take all these things into consideration, you’re looking at an average of 35% to 45% increase in raw material costs so farmers, irrespective of who they are insured with, need to review their insurance immediately,” he said at the launch of Irish Farmers Journal’s Land Price Report 2021 this week.
“Pick up the phone to your insurance company and say ‘I haven’t reviewed my building sum insured in quite a while. What do I need to do?’”
The “sum insured” is the amount at which your buildings or contents are covered and is the most your insurer will pay if these are totally destroyed.
According to Doherty, actually insuring the outbuildings is the cheapest aspect of the policy.
“If a farmer were to increase their outbuilding sum insured by €50,000, the approximate cost would be, depending on the company, only €50 to €60.”
He said: “Insurance is a legal contract and it’s critically important to get the values as accurate as you can to avoid a situation of under-insurance.”