Tractors have come a long way since they revolutionised farming in the early 20th century, but one thing hasn’t changed – they remain a farmer’s essential workhorse.
The UK was Europe’s fourth-largest tractor market in 2021, with 13,572 new units bought by farmers, accounting for almost 50% of their spending on equipment.
With a trend towards precision farming with more complex, and therefore expensive, machinery such as autonomous tractors, it’s more important than ever to get the right agricultural vehicle insurance cover to protect your valuable asset.
In this guide to tractor insurance, we’ll explore your options whether you have a single tractor or a large fleet, the legal requirements, and how you can save money on your cover.
- What type of tractor insurance do I need?
- How can I save money on my tractor insurance?
- What levels of tractor insurance cover can I get?
- What are the standard features of tractor insurance and what options are available?
The type of tractor, or tractors, you have and the way you use them both play a large part in determining what type of insurance you need.
You may be a smallholder using a single tractor on your own land; a commercial farmer with a fleet of vehicles; an enthusiast with a classic show tractor; or an agricultural contractor with one or more agricultural vehicles.
Tractor insurance is also known as agricultural vehicle insurance and, as well as standard tractors, can cover balers, combine harvesters, sprayers, ploughs, and diggers etc.
It’s an essential part of your overall farm insurance package.
Single tractor insurance
Smallholders and small-scale farmers often need insurance for a single tractor for use purely on their own land.
If your tractor never goes on the road, you may wonder why you need insurance at all.
But just like any other asset, your tractor is at risk of farm-related incidents such as theft, vandalism, electrical and other fires, accidental damage, and flood.
Given the importance of your tractor to your business, it makes sense to ensure its adequately protected.
Agricultural vehicle fleet insurance
Larger farms usually have a fleet of agricultural vehicles, including tractors, combine harvesters, balers etc.
These vehicles can all be insured on a single fleet policy, which can also include farm implements and attachments, as well as other farm vehicles like 4X4s, commercial vehicles, and private cars.
If you hire in vehicles to carry out a specific task, these can also be added to the policy on a temporary basis.
Is single tractor insurance a cheaper option than a fleet policy?
No, while you could choose to insure all of your vehicles on separate policies, it’s highly unlikely it would be any cheaper than opting to take out a fleet policy.
It would simply add to your admin burden by having multiple policies where one would suffice. Most policies would have a minimum premium per policy, therefore taking out multiple policies would lead to unnecessary duplication of these premiums.
An exception could be if you have a very high value vehicle, £350,000+ for example, and your fleet insurer imposes a very high premium because it’s a higher level of risk than the insurer would usually accept.
In this case, finding another insurer to provide cover for that vehicle in isolation is likely to prove more cost effective than having it on your fleet policy.
Vintage tractor insurance
If you own a classic tractor, you may be best served by taking out specialist vintage or classic tractor insurance, although even very old vehicles can still be insured on a fleet policy.
It’s important that you let your insurer know exactly what the vehicle will be used for, such as shows and events, or hired out for weddings, to ensure you have the right cover.
For example, wedding cover is classed as ‘hire and reward’ and is excluded on most standard policies.
Even if you never take your vintage tractor on the road, it’s worth insuring it because of the potentially high cost of hard-to-find parts and restoration.
Some classic tractor policies can be based on an agreed vehicle value, rather than market value, and might offer a discount if the annual mileage is limited.
Agricultural contractor insurance
Agricultural contractors hiring out a tractor or other farm vehicle with a driver will need a special type of policy that takes account of the increased risks involved.
This type of policy will cover any third-party damage caused to the property where you are contracting, as well as road risks for the journey to and from the farm.
Factors that influence the cost of tractor insurance include the type and value of the tractor, what it is used for, and who is driving.
You can’t do much about some of these factors, but there are several things you can do to keep the cost of tractor insurance as low as possible.
Security: theft is one of the biggest risks facing farmers, with organised crime gangs targeting agricultural vehicles in isolated, rural areas, taking either entire vehicles or the easier pickings of expensive precision farming and GPS tools.
Fitting immobilisers and tracking devices can mitigate risk and bring down the cost of insurance, while you should try to keep vehicles in locked sheds overnight and consider installing CCTV.
Claims: insurance premiums are partly rated on the claims history of the customer – the more you claim, the more likely your premiums are to increase. So it pays to only claim when you really need to.
Increase your excess: the excess is the part of a claim paid for by the customer – for example, the first £250 of any claim. Increasing the voluntary excess can bring down premiums.
Driver experience and training: more experienced drivers are considered lower risk, while those who have undertaken advanced training can also receive insurance discounts.
Driving history: drivers who have had claims in the past, or motoring convictions, are likely to attract higher premiums than those with a clean record.
Type of tractor and its use: if you don’t want to pay more than necessary for insurance, get the right tractor for your needs rather than a more expensive one with features you won’t use, such as satellite controls. Also, ensure you adjust the vehicle’s market value at renewal, as premiums are partly based on vehicle values.
Vehicle storage: reduce the possibility of claims by storing the vehicle safely, for example if it’s just come off the field and is still running hot, don’t park next to hay/straw bales. Allow vehicles to cool down first and clean them down internally as best possible to remove any combustible materials, for example, after harvesting.
Maintenance inspections: although keeping your tractor maintained won’t directly impact your premiums, well-maintained vehicles are less likely to suffer from breakdowns and malfunctions that could lead to claims.
There are four basic levels of tractor insurance cover. You’ll need to think carefully about which level of cover is appropriate for your needs, which may depend on the vehicle’s value, whether it’s used on the road, and what it is used for.
- Comprehensive: cover for fire, theft, and accidental damage to your vehicle, as well as damage to third-party vehicles if you cause an accident. Also includes compensation for personal injuries caused by your actions, either on the road, on your farm, or on someone else’s premises.
- Third party fire and theft: as comprehensive cover but without the accidental damage cover to your own vehicle. You’re covered for fire, theft, and injury or damage to third parties.
- Third party only: the legal minimum cover to use your tractor on public roads, it covers only personal injury to third parties caused by your tractor while you are driving it, or damage to their property. There is no cover for loss of or damage to your own tractor.
- Laid up fire and theft: covers your vehicle for fire and theft only while it is either not in use, or used only on your own land and not on public roads.
We’ve talked about the levels of tractor insurance cover, but what else is insured and what optional extras are available?
Standard features vary from one insurer to another – for example, the Alan Boswell Group farm scheme underwritten by Aviva includes cover for GPS equipment as standard (with inner limits), as well as cover for glass and windscreens on comprehensive policies. Although some of these covers, such as for GPS equipment, may be better insured under an all risks section of a farm combined insurance policy.
In addition, there’s cover for trailers, agricultural implements, and attachments, whether they are attached to the vehicle or not, plus loss of or damage to personal belongings in the vehicle.
Other extensions to cover can include:
- Legal expenses: covers the costs of defending yourself following an insured incident, such as a road accident where you cause third party damage.
- Personal accident: covers the tractor operator for injury, bodily disablement, or death because of an accident.
- Additional increased cost of working: farm insurance can sometimes provide cover for the cost of hiring a temporary replacement vehicle if you have a breakdown and your tractor is out of action.
Is tractor insurance a legal requirement?
Tractor insurance is a legal requirement if you drive it on the road or anywhere other than your private land. If you never leave your own land, there is no legal requirement to take out insurance, but you will not be covered for any loss or damage to the vehicle, or any third-party risks – for example, damage to property or any person visiting your land.
Who is covered to drive a tractor?
You must have a valid driving licence to drive a tractor on public roads.
Alan Boswell Group provides cover for any licensed person driving with the policyholder’s consent. You will need to advise your insurer or broker of any new drivers who have any claims, motoring, or criminal convictions.
What level of excess should I choose?
Your insurer will usually specify a minimum level of compulsory excess, and some may offer a premium discount for choosing an increased voluntary excess.
Ensure that you could afford to pay for any repairs if you choose an increased excess.
Insurers may impose an increased compulsory excess in the event of a poor claims history, or the potential risk or exposure increases, for example, the use of a tractor changes or you purchase a very high-value vehicle.
Is electrical damage covered as part of my tractor insurance policy?
Most insurers do not cover electrical faults, but may cover you for the damage caused by the fault.
For example, many insurers will provide cover for a fire caused by faulty electrical wiring.
What am I not covered for?
You will not be covered for the policy excess.
Your insurer is unlikely to pay out if you are in breach of a policy condition, such as failing to declare previous claims or convictions, undertaking business outside your business description, or failing to take reasonable care of your asset – such as leaving a tractor unattended with the keys in it.
Do I need to MOT an agricultural vehicle?
Tractors do not need an MOT, and neither does any vehicle on the road for no more than six miles a week when passing between two areas of your own land.
Do tractors need to be taxed?
No, vehicles used for agricultural, horticultural, and forestry purposes are exempt from vehicle excise duty.
How can our farm insurance experts help you?
Alan Boswell Group is one of the UK’s leading farm insurance brokers, with decades of expertise in designing a range of tailor-made schemes to fit farm businesses large and small.