Buildings in the Balance: Crucial For Your Agricultural Insurance

The insurance industry has focused heavily on underinsurance since the impact of Covid-19. According to one rebuild surveyor* 2024 figures show 76% of UK buildings they surveyed to be underinsured. Regional data shows even higher rates: 80% in Wales, 82% in the North West, and 78% in the Midlands.

Property owners underinsure when they fail to declare the correct rebuild cost to their insurer. In the event of a loss such as a fire, the building sum declared would not be sufficient to actually rebuild the property to the same standard and condition as it was just before the loss.

Following a claim, if an insurer finds your property to be underinsured, they may apply the rule of average. If your insurer determines your property is undervalued by 50%, they may cut your claim payout by 50%. For example, a barn insured for £75,000 is damaged in a storm and a claim is made for the roof. The barn is surveyed by a loss adjuster and found to be underinsured by 50%. The repair costs £25,000, but the insurer applies the rule of average and pays only £12,500 – can you cover the rest?

If your insurance broker hasn’t spoken to you about your property values and the risk of underinsurance in the last 12 months, they really should. I recommend reviewing each building on site – how much would it realistically cost? Factor in more than materials – consider special access permits, relocating livestock, and conservation area restrictions. These factors help you calculate a realistic rebuild value and ensure you have adequate coverage if disaster strikes.