One of the biggest oversights that a farmer can make is underestimating the insurance value of livestock maintained within the business, according to head of agriculture at Abbey Autoline Insurance, Richard Henning.
The actual insurance figure should “relate to the value the stock when they have completed their production cycle: Not when they arrive on the farm”, he said.
“For example, there is no point insuring cattle for their bought-in price at the start of a grazing season. The much more relevant figure relates to their value of the stock when they leave the farm at the back-end.
“The value of an animal will appreciate on an almost dairy basis while it is on a particular farm,” Henning added.
Insurance value
What’s more, accidents are more likely to happen to stock as they are loaded on to trailers or lorries. And, for the most part, these are activities that very much relate to the movement of animal form farm to market or farm to meatplant.
According to the insurance specialist, breeding animals should be assessed in the same way. E.g., there is no point in using a January book value for a breeding ewe.
Rather, it should be a case of valuing that animal when she has her lambs at foot.
And the same principle holds for suckler and dairy cows. The insurance figure should specifically reflect the maximum value of an animal during its annual breeding cycle.
“Some farmers may be of the view that the insurance value of an animal can be agreed at the time of an accident taking place.
“This is not the case. The values submitted for animals at the time of an insurance policy being agreed cannot be changed, should an accident occur at some future date.
“This is why it is so important for farmers to get the valuation figures correct at the outset,” Henning said.
Traditionally, the New Year is a time when we take stock of our affairs and start planning for the future.
Insurance cover will remain an absolute requirement for all farming businesses in Northern Ireland. Liability cover is a case in point.
The last 12 months have seen insurance premiums rise across the board throughout the UK.
So, perhaps, it’s worth reflecting on the basic principles that drive the provision of insurance cover and the factors that contribute to the cost of an insurance premium.
The insurance premiums of many pay for the losses incurred by a few.
The actual premiums paid by policy holders comprise three elements: The 12% insurance tax paid to government; the commission secured by agents and brokers and, finally, the actual costs incurred by the insurance company in delivering the degree of cover agreed with the client.
