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Is your fencing under insured?

17 December 2020

Fencing-Article_.jpg (55 KB)

Farm fencing often hides in plain view and is something that – in the grand scheme of things – is often considered low-value. But the costs involved in replacing your fencing can quickly rack up, and material and labour costs are rising all the time, too.

When it comes to considering farm essentials that hold significant value, your mind naturally jumps to your home, livestock, crops and machinery. And, you’d be right.

But, when it comes to items that are costly to replace if they were destroyed by – for example, a bushfire or major weather event – your fencing should also feature high in your thinking.

“Farms can have kilometres of fencing but given a fence may last 20 to 30 years, it’s something you rarely think about and is often replaced grudgingly,” says Danny Pedisic, Head of Product at Elders Insurance.

Underinsurance in fencing

If a bushfire came through your land, or large portions of fencing was damaged by a weather event, the cost of replacement would be significant.

However, fencing is often underinsured – due to rising material values or underestimating the true cost of a replacement – or in some cases, not insured at all.

Many hobby farms or domestic housing on acreage, that rely on home insurance may overlook the fact that their fencing – as well as outbuildings such as sheds, workshops, and stables – need to be listed specifically under the farm property section. If they’re not listed, they may not be covered.

And, even if you’re comfortable in the knowledge that fencing is specifically listed on your insurance policy, it’s important to review the sum insured. This is because it needs to reflect the cost of removing and disposing of the old fencing, as well as the materials and labour of installing the replacement.

Anecdotally, people misconstrue that fencing is a low-cost item to replace; however, the reality is somewhat different.

As a rule of thumb, you should insure for around $10-$12 per metre of fencing. In the last five years, there has been an increase of approximately $3 per post. Rolls of wire have gone up by $100. Pine posts are 25 per cent higher while hardwood has seen a 25 per cent increase.

“Energy and steel prices affect fencing costs, and both have been increasing, too, so it’s far better to allow a little bit more in your sum insured to cover the inflation of costs,” says Pedisic.

Reviewing your farm insurance

It’s best practice to revisit your farm insurance cover and the sums you have insured on an annual basis.

“You may have bought new machinery or assets, which need to be factored into your policy. Or, for example, the value of your property may have increased, or the cost of replacing items may have changed as well,” explains Pedisic.

The ‘Black Summer’ of 2019-2020 saw just how devastating bushfires can be in rural areas particularly – and the heartbreaking consequences of being underinsured, or not insured at all. Other weather events, such as storms and cyclones, can also impact fencing.

At Elders Insurance, your local Agent will work with you to understand the cost of replacing your fencing to ensure you have adequate cover.

Ultimately, insurance is a safety net should the worst happen – and you need to ensure that safety net is strong enough to cope.

Your local Elders Insurance Agent can help you explore every aspect of your property and/or farm operations to tailor your cover to meet your needs. Find your local Agent today to learn more.    

 

This article was compiled based on information available to Elders Insurance on or before December 2020. The general advice in this article has been prepared without taking into account your objectives, financial situation or needs. You must decide whether or not it is appropriate, in light of your own circumstances, to act on this advice. This advice does not form part of any insurance policy and is not used in the assessment of insurance claims. Any insurance claim will be assessed against the policy terms and conditions and applicable law.  

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