Farm machinery insurance: what does it cover?

Farm machinery can be one of the most expensive parts of running a farm.

A tractor, harvester or other major piece of equipment can cost a lot to repair or replace, but working out how it's insured isn't always straightforward.

That's because “farm machinery insurance” isn't necessarily one type of cover.

Depending on the insurer and the machine, it could fall under farm property, farm vehicle or machinery breakdown cover.

What farm machinery can you insure?

The machinery insurers will consider depends on the policy.

It can include equipment such as:

• tractors
• harvesters and headers
• slashers and implements
• irrigation equipment
• pumps
• generators
• fixed farm machinery
• mobile farm machinery
• other agricultural equipment

You may need to give the insurer details of individual machines, especially higher-value equipment.

What's the difference between machinery damage and machinery breakdown?

This is one of the most important things to understand.

A policy covering your machinery against certain types of loss or damage doesn't automatically mean you're covered if the machine stops working because of a mechanical or electrical problem.

Machinery breakdown can be a separate type of cover.

For example, you could have one section of a policy that covers certain accidental damage to machinery and another that covers certain types of breakdown.

Check both rather than assuming “the tractor is insured” answers the whole question.

How can tractors be insured?

Tractors are a good example of why farm machinery cover can get confusing.

Depending on the insurer, the tractor and how it's used, it could be treated as mobile farm machinery or covered under a farm vehicle section.

If you drive machinery on public roads or use it away from your own property, make sure the insurer knows.

The right cover can depend on the machine and how you use it.

Does farm insurance cover machinery breakdown?

It can, but don't assume it's included automatically.

Some farm insurers offer machinery breakdown as its own section or as an optional part of the policy.

This can cover certain mechanical or electrical breakdowns of insured machinery, depending on the policy.

Exactly what counts as a breakdown, which machines are covered and what the insurer will pay can vary.

What about accidental damage?

Farm property or machinery cover can provide protection against certain types of accidental damage, depending on the policy.

The important thing is to check which events are covered.

For example, damage following an accident may be treated differently from wear and tear or a mechanical failure that develops over time.

What about theft?

Some farm policies can cover insured machinery if it's stolen.

Again, check the conditions.

Where the machinery was stored, what security was in place and the circumstances of the theft can all be relevant to whether a claim is covered.

Is machinery covered away from the farm?

Not always.

If you use machinery on another property, transport it between farms, do contracting work or regularly move equipment, tell the insurer.

A policy that covers a machine while it's sitting on your farm doesn't necessarily provide exactly the same cover everywhere you take it.

If machinery regularly leaves the property, this is worth checking before you buy the policy rather than after something happens.

What information might you need to provide?

When arranging machinery cover, you may be asked for details such as:

• what the machine is
• its make and model
• its age
• what it's worth
• what you use it for
• where it's usually kept
• whether it leaves the farm
• whether it travels on public roads
• maintenance details
• whether it's owned, financed, leased or hired

The insurer won't necessarily ask every one of these questions, but having the information ready can make getting quotes easier.

How much should you insure machinery for?

Check how the policy values machinery before choosing your cover.

Depending on the product, the amount paid after a claim can be affected by the value you've insured the machine for and the way the policy calculates a loss.

Avoid simply putting in a lower value to make the premium cheaper.

If an important piece of equipment is worth much more than you've allowed for, you could be left short when you need to replace it.

What about hired or borrowed machinery?

Don't assume machinery is covered just because it's being used on your farm.

If you hire, lease or borrow equipment, check who is responsible for insuring it and what your policy covers.

The same applies if you lend your own machinery to someone else.

What should you compare between machinery policies?

Price is only one part of the comparison.

It's worth checking:

• which machines are covered
• what they're insured for
• accidental damage
• mechanical or electrical breakdown
• theft
• where the machinery can be used
• whether road use is covered where relevant
• excesses
• exclusions
• whether additional cover needs to be selected

Two quotes can cost a similar amount and still offer quite different protection for your machinery.