Soaring building material and labour costs are potentially leaving huge insurance shortfalls to cover for rebuild costs in the event of damage to farm buildings or properties, farmers are being warned.
A combination of the cost of materials, such as soft wood, steel, roofing sheets and concrete, along with the difficulties in sourcing them, presents a major problem, raising the prospect of being under-insured by a minimum of 30% for rebuild costs, according to Acres Insurance Brokers.
“We have seen two examples in the last six months where clients have suffered major fire damage, firstly to a cottage and secondly a farm building,” said Acres director and insurance broker Nigel Wellings.
“In both instances, when quotes were obtained to reinstate the buildings, the insured values were found to be 30-40% below the rebuild costs we are now being quoted. This has left the clients substantially out of pocket.”
In both cases, loss adjustors confirmed the sums insured would have been sufficient to reinstate 12-18 months ago.
Mr Wellings said: “Acres has made the point of speaking to a number of loss adjustors and building contractors dealing with insurance claims, and the same figures of 30-40% increases in re-building costs are being quoted to us.
“We are strongly urging all of our clients to review rebuild costs on both houses and farm buildings, and in many cases, we are increasing the sums insured on these properties by 30-35%.”