Meet the Experts: Chris Robson gives advice of Under Insurance

Written by Chris Robson

The ongoing supply chain crisis spells significant delays in building work as farmers across the UK try to recover from the recent storms, with some farmsteads likely to come up against under-insurance issues.

In late November, Storm Arwen wreaked havoc across part of the country, bringing snow and strong winds which resulted in power outages, the collapse of buildings and loss of life. The farm insurance sector saw new notifications in the agricultural and property space increase by 300% in the wake of the storm. Just a few days after storm Arwen blew over and Storm Barra brought yet more extreme weather, and more notifications.

Whilst the spike in claims has been manageable, what will be more challenging is the remediation work. While it’s still early days, the insurance industry expect the supply chain to be a big sticking point. This is an issue we’ve collectively been grappling with throughout 2021 as the impact of Brexit, the Covid-19 pandemic and longer-term supply chain issues culminated in a shortage of materials and labour, as well as price hikes across the construction industry. Claims costs for farmers and their insurers have consequently gone up, potentially leading to see under insurance issues arising from this. From speaking to local suppliers and surveyors the general consensus appears to be the impact overall has added 20% to 30% increase in the cost of building works to prices pre-covid.

Impact of Under-insurance

As a consequence, it is vital to ensure that buildings are correctly valued for rebuild costs to ensure that full funds for reinstatement and repair of damage are made available in the event of a loss.
Research by suggests underinsurance is incredibly common, so taking out less cover than is required can have severe consequences for a farm. In the event of a loss, the farm can find it’s seriously out of pocket if underinsurance becomes apparent through the claims management process. Where a farm is underinsured, the insurer can apply the average clause. With this, if the insurer finds the sum insured is inadequate, it can reduce the settlement proportionately by the same percentage the asset is underinsured.

Some Farmers across the UK will be seeking to repair damages from the recent extreme weather events, which may have had significant impact and many will have been caught off guard. For Farmers who have not been directly impacted by the recent weather events, it would be prudent to complete a re-valuation of their properties at the earliest opportunity in light of the spiralling re-build costs. This will provide much needed peace of mind that the correct cover is in place while we weather this volatile time.

At Caleb Roberts we will always discuss your sums insured and we do recommend a regular property valuation through services such as or we can recommend a local property surveyor. For further information please contact Chris Robson on 07974 685456.