Cover your buildings
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Are your smallholding buildings adequately insured? Specialists Ritesure explain
We all know that buildings, be they residential, commercial, or agricultural, come in many different shapes and sizes, and all with a multitude of uses, possibilities, and potential. It’s so tempting to see a building on your property that’s ripe for renovation, extension, or a change of use, and get stuck in to an exciting building project.
Many farms and smallholdings have heritage and period charm, and therefore buildings such as cottages, barns and stables are often made from traditional materials, such as brick, stone, lime render, oak beams, thatch, and slate tiles. When renovating or extending such buildings, preserving and complementing the original construction can be costly, but particularly expensive if you ever need to replace and rebuild should the worst happen. So it’s important to make sure the insurance cover you have on them is adequate, and that the sum insured is appropriate.
And it’s these types of buildings that often have the greatest potential to offer commercial value, turning them into characterful leasehold dwellings, function venues, or holiday lets, all of which can be a tantalising proposition as it could bring additional revenue into your farm or smallholding. Depending on your commercial plans for the property, the methods of renovation and construction, and its usage in the long run, however, will also determine the cover you will need.
“Many people are unaware of the insurance required for properties that are used commercially, and particularly unrealistic with the value placed on rebuild costs,” says Cameron Thomas of Ritesure, specialists in rural and agricultural insurance. “If you don’t insure the full value of your buildings then any claim will be reduced in proportion with the amount you have insured.”
Cameron explains: “If you insure a building for £50,000 when the realistic rebuild is £100,000, any claim would be reduced by 50%. For example, consider an almighty storm reduces your building to a pile of rubble – not the nicest thought, I know. You need to make provision for that possibility and therefore the cost of debris removal, which is increased if the building has an asbestos roof, new concrete floors, traditional materials, contractors, and so on, within the amount you have insured.”
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Also, Cameron advises that cover for storm, tempest or flood, is not standard with the majority of farm and agricultural insurance companies and needs to be selected and clearly shown within the insurance documents. “This, in particular, can often catch people out,” says Cameron, “and it’s too late to think about these things when a claim is made.”
So, whatever type of buildings you have and whatever you’re using them for, now and in the future, you should always ask yourself – or, more sensibly, your insurance broker – whether you’re suitably covering your assets. One size does not fit all!