iFarm Underwriting has raised concerns over rising underinsurance among UK farms, describing the issue as increasingly costly for farmers across the country.
The Rokstone-owned managing general agent said one in 10 farm property claims it has handled since October 2022 were significantly underinsured. Insurance cover fell short by an average of nearly 40%.
Farmers affected by underinsurance saw claim payments reduced by around 45%, according to iFarm's data. Average shortfalls exceeded £11,000 per claim, with gaps surpassing £30,000 in larger losses.
The UK's agricultural insurance market is forecast to surpass USD 530 million by 2030, according to Bonafide Research, serving farmers ranging from small-scale horticultural producers to large commercial cereal and oilseed operations.
The findings also align with research from valuation specialists Charterfields. The firm's 2025 Underinsurance Report found that 88% of UK properties surveyed were underinsured, with over a third insured for less than half of their true rebuild cost.
The underinsurance gap has been exacerbated by years of elevated construction costs. According to the Office for National Statistics, UK construction inflation peaked at 10.4% in May 2022 before moderating to around 3% by 2024.
However, according to BCIS forecasts, building costs are expected to rise a further 15% over the next five years, with labour costs climbing 18% by 2030 – driven by National Insurance increases and wage pressures.
Rural properties were identified as particularly exposed due to non-standard construction and heritage materials. Specialist labour requirements and longer rebuild periods add further costs.
Farm ventures such as renewable energy projects, weddings, and hospitality operations are rarely included in traditional policies unless specifically added, introducing further coverage gaps.
Adam Mawer, technical underwriting manager at iFarm, said agricultural buildings require specialist underwriting and accurate rebuild assessments.
He noted that assets ranging from livestock sheds and grain stores to heritage farmhouses and stone barns cannot be treated as standard commercial risks.
"Our data shows very clearly that underinsurance isn't a theoretical risk, it's happening now, on real farm claims, and it's costing farmers serious money," Mawer said.
