FARM INSURANCE , comprehensive or third party

kerry cow

I was renewing my farm and machinery insurance soon and in the past I have pretty much cover for everything comprehensive , and also livestock cover , transport , etc etc .costing up to 20k per year , but in the year that is in it ,I am thinking of slashing everthing to basic , third party fire and theft but , keeping public liability , employers liability and home insurance as was , any thoughts on it , as I have a large farmer friend who only uses minimum cover all his life , but we wouldnt tell me all the pro or cons ,
All feed back appreciated

Sam Kade

I've only very basic cover public liability and livestock. Tractors and machinery are old and don't go on the road buildings are also old. Every year when renewal time comes round they tell me I'm under insured, I don't take much notice of them.

kerry cow

Thats what they say each time I come for renewal as well , sometimes I think we are lead in to believing that we are been foolish but at the end of the day these companies want our money and when it come to paying out they don't like parting with theirs , this is a year for cut backs .

Bullocks

Murphy's law would dictate that the year you cut back on premiums is the year you will probably need to claim for something , it would be down to yourself to call what your happy insuring or not .
20k is a lot of insurance though so you should sit down with a few insurance co's and see if they can do much better on the money for the same cover maybe

NUTLEY BOY

For vehicles, third party fire and theft should be adequate if they are very old and you are not likely to get much if they were written off. Just be careful that you don't fall foul of some insurers who might not give you cover on an old vehicle (say greater than 10 years of age) if you try to reduce cover to TPF&T.

That said, for the older vehicle there may not be much reduction in premium by going down to TPF&T. Ask well before renewal for a quote for the lesser cover.

For liability covers, you really need to double check that your limits of indemnity are adequately high enough. If you look at court awards these days you will see for the serious cases that they are not cutting back on what they are awarding !

As far as buildings, stock and the like are concerned you are the one who decides what level of cover you want or need. However, if you have a major or a total loss and the level of cover is inadequate you will be penalised financially for being underinsured. Insurers may apply something called "average".

Average works like this. Suppose your buildings should have been insured for €750,000 but you only had cover for €600,000. You then have a loss of €90,000. The insurers will apply average this way : €90K x €600K / €750K = €72K. In other words, the underwriters will reduce your claim by the proportion that your sum insured bears to what it should have been.

Under insurance can be a false economy. If you underinsure you are really becoming your own insurer for the shortfall.

Policyholders need to decide independently but correctly what it is going to cost to reinstate the building, replace the stock or whatever. Some insurers will operate automatic escalation clauses to increase the sums insured and the premiums at each renewal but that is not very helpful if you end up over-insured.

Just my 10 cents worth from the smoke.................

orm0nd

NUTLEY BOY wrote: »

For vehicles, third party fire and theft should be adequate if they are very old and you are not likely to get much if they were written off. Just be careful that you don't fall foul of some insurers who might not give you cover on an old vehicle (say greater than 10 years of age) if you try to reduce cover to TPF&T.

That said, for the older vehicle there may not be much reduction in premium by going down to TPF&T. Ask well before renewal for a quote for the lesser cover.

For liability covers, you really need to double check that your limits of indemnity are adequately high enough. If you look at court awards these days you will see for the serious cases that they are not cutting back on what they are awarding !

As far as buildings, stock and the like are concerned you are the one who decides what level of cover you want or need. However, if you have a major or a total loss and the level of cover is inadequate you will be penalised financially for being underinsured. Insurers may apply something called "average".

Average works like this. Suppose your buildings should have been insured for €750,000 but you only had cover for €600,000. You then have a loss of €90,000. The insurers will apply average this way : €90K x €600K / €750K = €72K. In other words, the underwriters will reduce your claim by the proportion that your sum insured bears to what it should have been.

Under insurance can be a false economy. If you underinsure you are really becoming your own insurer for the shortfall.

Policyholders need to decide independently but correctly what it is going to cost to reinstate the building, replace the stock or whatever. Some insurers will operate automatic escalation clauses to increase the sums insured and the premiums at each renewal but that is not very helpful if you end up over-insured.

Just my 10 cents worth from the smoke.................

+1

Sam Kade

NUTLEY BOY wrote: »

For vehicles, third party fire and theft should be adequate if they are very old and you are not likely to get much if they were written off. Just be careful that you don't fall foul of some insurers who might not give you cover on an old vehicle (say greater than 10 years of age) if you try to reduce cover to TPF&T.

That said, for the older vehicle there may not be much reduction in premium by going down to TPF&T. Ask well before renewal for a quote for the lesser cover.

For liability covers, you really need to double check that your limits of indemnity are adequately high enough. If you look at court awards these days you will see for the serious cases that they are not cutting back on what they are awarding !

As far as buildings, stock and the like are concerned you are the one who decides what level of cover you want or need. However, if you have a major or a total loss and the level of cover is inadequate you will be penalised financially for being underinsured. Insurers may apply something called "average".

Average works like this. Suppose your buildings should have been insured for €750,000 but you only had cover for €600,000. You then have a loss of €90,000. The insurers will apply average this way : €90K x €600K / €750K = €72K. In other words, the underwriters will reduce your claim by the proportion that your sum insured bears to what it should have been.

Under insurance can be a false economy. If you underinsure you are really becoming your own insurer for the shortfall.

Policyholders need to decide independently but correctly what it is going to cost to reinstate the building, replace the stock or whatever. Some insurers will operate automatic escalation clauses to increase the sums insured and the premiums at each renewal but that is not very helpful if you end up over-insured.

Just my 10 cents worth from the smoke.................

What happens when you're over insured?

50HX

i have it cut back to the min

the way i look at it with regards to the slatted sheds is that you can't flood them or burn them to the ground

i have the public liability, tractor insured and a shed with listed machinery in it covered

after that good luck

amacca

Sam Kade wrote: »

What happens when you're over insured?

Insurance company wins again you can be sure .....basically they screw you both ways

Heres how it was explained to me and I don't know if its 100% accurate (but it pissed me off no end) lets say that if had say 40k worth of stock I couldn't just insure up to 20k taking the risk that not all stock would be lost in the event of unforeseen circumstances but still have cover if say one animal was lost as it would be well under the 20k you would be paying a premium to have insured (if that makes sense)

in that instance I was told because you don't have the full value of all the stock insured you won't get the full value of the one animal lost .... the payout will be reduced by the amount you are underinsured - in this instance by 50%....I find that hugely unfair in a way as you would be paying a premium which reflects the fact up to 20K is being insured therefore every loss up to 20k should be covered in my opinion and after 20k there should be no payout......it also does not allow you to tailor the insurance product to the level of risk you are willing to take as no matter what goes wrong there will always be a reduction on the payout

bullnuts

kerry cow wrote: »

I was renewing my farm and machinery insurance soon and in the past I have pretty much cover for everything comprehensive , and also livestock cover , transport , etc etc .costing up to 20k per year , but in the year that is in it ,I am thinking of slashing everthing to basic , third party fire and theft but , keeping public liability , employers liability and home insurance as was , any thoughts on it , as I have a large farmer friend who only uses minimum cover all his life , but we wouldnt tell me all the pro or cons ,
All feed back appreciated

Sorry if I'm misunderstanding but you pay 20k out on insurance? ?😦😦

kerry cow

Yes 20k , on 5 houses , comp on all machinery , cattle accidentally cover , employers liability , public, liability, ,motor 2 cars ,3 jeeps , its probably more than 20k if I was to add it up more accurate, but point I am seeking , is for example is say a house worth 150k to build and furnish then fbd turn around and say we think it should be insurd for 250k because they have a figure per sq foot as per theie bible .if I insure for 150 k where does that leave me in the event of a fire or storm damage etc , is this a case of we should insure for the figure we are happy with , hope that makes sense.

Bullocks

kerry cow wrote: »

Yes 20k , on 5 houses , comp on all machinery , cattle accidentally cover , employers liability , public, liability, ,motor 2 cars ,3 jeeps , its probably more than 20k if I was to add it up more accurate, but point I am seeking , is for example is say a house worth 150k to build and furnish then fbd turn around and say we think it should be insurd for 250k because they have a figure per sq foot as per theie bible .if I insure for 150 k where does that leave me in the event of a fire or storm damage etc , is this a case of we should insure for the figure we are happy with , hope that makes sense.

Let them value it when they're giving you a quote

NUTLEY BOY

Sam Kade wrote: »

What happens when you're over insured?

You will probably get no credit for it unless you have one of those commercial type policies that allows for adjustments at year's end where the premium is based on turnover or the like.

NUTLEY BOY

Bullocks wrote: »

Let them value it when they're giving you a quote

The problem there is that you just will not get insurance underwriters to do that.

The responsibility for selecting adequate sums insured rests full square on the policyholder. That responsibility revives at renewal each year. If you then have a claim they will not be long in telling you if you were underinsured if that happened to be the case.

Bullocks

NUTLEY BOY wrote: »

The problem there is that you just will not get insurance underwriters to do that.

The responsibility for selecting adequate sums insured rests full square on the policyholder. That responsibility revives at renewal each year. If you then have a claim they will not be long in telling you if you were underinsured if that happened to be the case.

I thought FBD would come out to value sheds but I might be wrong

NUTLEY BOY

amacca wrote: »

Insurance company wins again you can be sure .....basically they screw you both ways

Heres how it was explained to me and I don't know if its 100% accurate (but it pissed me off no end) lets say that if had say 40k worth of stock I couldn't just insure up to 20k taking the risk that not all stock would be lost in the event of unforeseen circumstances but still have cover if say one animal was lost as it would be well under the 20k you would be paying a premium to have insured (if that makes sense)

in that instance I was told because you don't have the full value of all the stock insured you won't get the full value of the one animal lost .... the payout will be reduced by the amount you are underinsured - in this instance by 50%....I find that hugely unfair in a way as you would be paying a premium which reflects the fact up to 20K is being insured therefore every loss up to 20k should be covered in my opinion and after 20k there should be no payout......it also does not allow you to tailor the insurance product to the level of risk you are willing to take as no matter what goes wrong there will always be a reduction on the payout

On the face of it, your argument is a fair one in that you want to be a self-insurer by carrying the balance of the risk above €20 K.

Many insurance policies have internal limits on certain benefits. A simple example would be a house insurance policy that covers money/cash up to €150. You are insured up to €150 and you are your own insurer above that if you keep more than €150 in the house.

However, I suspect that the underwriters answer to your argument relates to their exposure to risk and the need to define it accurately.

I have not the first clue as to what an animal might cost. Say a cow costs €5K [ now please if I am way off ] and you have 8 of them. That is a total exposure of €40K.

Suppose one cow is hit by lightning and killed. You claim €5k. The problem here is that the underwriters are actually running the risk that any 1 out of a population of 8 cows could be the source of the claim. They will say that they are exposed to a potential claim from any number of the 8 cows and that 8 cows is their true total financial exposure. I suspect that that is how insurance underwriters think.

NUTLEY BOY

Bullocks wrote: »

I thought FBD would come out to value sheds but I might be wrong

I stand corrected on that so.

The general position is that underwriters will not do the valuation work for the policyholders. If they did, it would eliminate a lot of arguments as values could be agreed before a potential loss.

kerry cow

To be honest insurance companies sicken me to death , they want you premium but if you claim they will screw you , it reminds me if paddy power asked us the details of our last winning bet before he decided first if he was going to allow you gamble and then at what odds he was going to offer you. But in reality paddy power knows someone is going to win and always pays out , fbd never wants to loose and if they do it down to hoop jumping and fine print before "the settlement " .
Difficult to live with them but can't live without ,

orm0nd

amacca wrote: »

Insurance company wins again you can be sure .....basically they screw you both ways

Heres how it was explained to me and I don't know if its 100% accurate (but it pissed me off no end) lets say that if had say 40k worth of stock I couldn't just insure up to 20k taking the risk that not all stock would be lost in the event of unforeseen circumstances but still have cover if say one animal was lost as it would be well under the 20k you would be paying a premium to have insured (if that makes sense)

in that instance I was told because you don't have the full value of all the stock insured you won't get the full value of the one animal lost .... the payout will be reduced by the amount you are underinsured - in this instance by 50%....I find that hugely unfair in a way as you would be paying a premium which reflects the fact up to 20K is being insured therefore every loss up to 20k should be covered in my opinion and after 20k there should be no payout......it also does not allow you to tailor the insurance product to the level of risk you are willing to take as no matter what goes wrong there will always be a reduction on the payout

another point, in our case
our renewal falls due when we have least value/number of stock on hand ie Oct

would be carrying a lot more in mar/april & we put that value for insurance purposes