Insurance is a necessary expense on all farms. While recognising the need for insurance, there has been a drive to cut insurance costs on farms over the last number of years. This is arising as a result of fluctuating farm incomes across all sectors. At the same time insurance premiums in particular vehicle and machinery have been creeping up.
However reducing farm insurance costs can be a short-term saving. It’s not about simple about cutting farm expenses be reducing your insurance cost but more about getting the right insurance to cover all your needs – private & business.
The real benefit of farm insurance is the safety net of being fully covered in the event of there being a claim.
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 want for their own business.
When you are changing insurer or reducing insurance cost, you must ensure that you are getting for like-for-like cover.
Each farm is a separate business and the risks on each farm, while common to each other, may be very individual. Farmers would need to carry out a risk assessment on their own farm as to any particular cover they would want. When carrying out a risk assessment on the business, farmers should be very mindful and never over look health and safety standards. The best insurance is a policy you hopefully never have to use.
Insurance is individual but is necessary and the comfort of being properly insured will be of great benefit to you, but also to your bankers, who may have lent on the farm.
It is important when choosing or changing your insurance provide that you take time to assess exactly what each company is offering and to identify any differences between them.
Here are some 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 they review and service as part of any new business transaction be provided during the lifetime of the policy.
Who do I contact at renewal date?
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?
How much is the excess on each policy?
Check the condition, 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 are 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 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.
Tell them everything, omitting certain information when completing application forms could later render your policy null and void.
Make sure to answer fully the new business qualifying questions proposal and declare all material facts to the insurer.
Am I guaranteed my previous insurer will re-quote 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.