HOW FARMERS CAN USE CROP INSURANCE TO THEIR ADVANTAGE
Insurance is generally seen as a cost rather than a tool to create positive outcomes. Insurance should be the cornerstone of your cropping decisions, It allows you to make positive decisions for cropping program knowing that the community has your back, via their premiums in the pool of funds spreading the risk.
Crop Insurance is a Financial/ Risk management tool that farmers can use to share the risk with the community, insurers, international re insurers.
Traditional cover is Fire and Hail insurance which will pay 100% of the yield that is damaged but only for the yield at the time of the damage. If a peril covered by the Multi-Peril reduces the yield, say from 3.0 to 1.0 tonnes per hectare (example used to make my math easier) you are only paid that yield at 1.0 per hectare for a Hail and Fire Claim, Which leaves you with only 33% of your hectare income, in a total loss situation.
Depending on how widely spread out your operation is, a total loss from Hail or Fire might be unlikely if, for example the properties are 20kms apart. In comparison a farmers operation that is together in one area, the chance of a total loss from Hail and Fire is possible and we have seen this before.
The limiting factor with Fire and Hail is the yield Farmers have nominated at the time of claim. Often this has been reduced to save insurance premiums and reflects actual yields.
Fire and Hail Insurance
Crop Insurance Options
Extra Harvest Options
Flexible Premiums – Higher excess, After harvest payments
Stored Crop – Cover available in Silo and Silo bags(limit to $10,000)