Alec Bond, of Farmers & Mercantile Ludlow office, commented in this week’s Farm Business Money Matters on the practice of obtaining competitive quotes online for farm & farm related insurances.
Full text of the article is below:
Alec Bond advises on how to get an insurance deal that works for your farm
Following Richard Wright’s column about obtaining insurance quotations (Bottom Line, Farm Business 20th January), I thought it prudent to look a little closer at this process with the farmers’ interests in mind.
What is the best approach to obtaining quotations and can farm business insurance really be compared with the numerous online car and home products?
There is nothing wrong with obtaining cheaper quotations from an online provider of car insurance and using it as leverage to get your current insurer to match a similar private car policy. Farmers should be wary, however, about using these websites to find a fair price comparison against their farm motor fleet insurances.
The cover will undoubtedly be more restrictive if the policy is not specifically written with agriculture in mind, especially with regards to what you can use the vehicle for, be it business use, restricted mileage, eligible drivers or towing, for example.
Increasingly we are seeing a trend of companies trying to undercut premiums by eliminating the costs of the invaluable annual meeting on farm between client and broker. If a cheaper quotation is obtained via the telephone or internet, don’t be fooled into thinking this compares with having an adviser consider your diverse needs.
FACE- TO-FACE APPROACH
We believe a face-to-face approach between the client and their broker is paramount to safeguard your needs, and traditionally farm insurance has always been conducted in this way.
We know that the annual on-farm review is an essential step; forego it and you risk under- or over-insurance.
A broker should always compare prices and covers with multiple insurers on your behalf and all cover should be written with your farm business in mind.
I would urge caution if you intend to ‘play the game’ of using alternative quotation methods
purely for price leverage. A website or telephone quotation division when faced with a claim can truthfully say “you never told us about that”, expecting that you should have understood all of the policy terms.
Farm business underwriting terms, unlike car insurance terms, are complex and require expert knowledge, especially when written using multiple carriers.
If you try to compare the price, the danger lies in that you cannot compare the cover!
It’s in the best interest of brokers to ensure their clients are paying a realistic premium for optimum cover and that any claim settlement adheres to terms and is fair.