Acres Insurance Broker is urging farm managers to check insurance policies to ensure that adequate cover is in place to claim against the cost of a hire machine, should fire damage interrupt harvest.
As costs for the hire of a high capacity machine can be upwards of £70,000, Nigel Wellings, director of Acres, has advised farmers to check what they are covered for in the event of a combine being rendered out of action.
“Imagine the scenario, you are on the second day of harvest and your combine goes up in smoke and is a complete write-off. You have 2,500 acres of crops still to cut and are obviously desperate to get the job done as soon as possible,” he said.
“The combine is comprehensively insured on an agricultural vehicle policy, so insurers will pay out the market value of the written-off machine. Payment from insurers for this will likely arrive in three to four weeks,” he added.
However, Mr Wellings said that the insurer will not cover the hire cost of a replacement machine to complete the harvest. This type of cover should be provided under the Business Interruption section of a farm policy.
“If this cover is arranged properly, you should be able to claim for all the cost of the hire of a replacement machine to get your harvest done,” he said. “In the above scenario, you are probably talking about a cost of £60,000 to £70,000 to hire a high-capacity combine to cut 2,500 acres. A number of insurers have limits on the amounts of hire costs that they will payout.”
He added that the common limit for hire vehicle costs is around £50,000, which is enough to hire a combine for around 1,700 to 1,800 acres. Some insurers may have limits as low as £10,000 which Mr Wellings explained is not sufficient. However, more insurers are offering policies with no restrictions on hire costs in the case of a combine fire.
“As brokers, it is vitally important that we have discussed the potential hire costs involved with individual farming businesses and arranged appropriate cover. You need to be aware of what your insurance policy covers you for in terms of hire costs, or run the risk of taking a serious hit on your harvest,” he concluded.