5 considerations when seeking a tailored crop insurance quote

Crop insurance is about protecting farmers from their biggest and most likely sources of risk. There's no point insuring them for perils they are unlikely to encounter, or leaving them without the necessary protection when they need it most. That's why a tailored crop insurance policy is the best approach.

The importance of a tailored crop insurance quote

Tailored agricultural insurance policies provide a variety of risk management options according to a farmer's individual circumstances. Farmers pay their premiums for protection when the worst happens. It's important that they have the best chance of recouping their losses if things do go wrong, so that it's not wasted money on their part.

Not every farmer faces the same risks and so their insurance needs to cater to the most likely scenario they'll face. One farmer's main risk may be drought, while another is more likely to face damage from hail. They also manage different risks according to the type of crop they grow, animals they rear or machinery they use.

As well as type of risk, each farm is working towards a different level of profit and across varying size of land. This means that the investment and profit each farmer expects is different according to their individual circumstances, so they need tailored cover that adapts to their expected yield. 

The point of crop insurance is to help farmers get back on their feet after a bad season or sudden crisis. If their policy doesn't adequately cover their losses, they may not be able to reinvest for the seasons ahead.

Farm machinery harvesting a crop, covered by tailored crop insurance.Some farms rely on machinery to harvest their crop and need insurance that takes this into account.

What should be taken into account when considering a tailored crop insurance quote?

You must understand how your farmer operates to provide the most appropriate risk management policy. Here are some of the crucial things you should know about each farm you work with.

1) Most likely perils

It's crucial you understand what problems your farmer might face so you can provide them with a policy that suits them. Risks come from a variety of directions, and can encompass weather, local factors, the type of crop they grow and how they harvest. Some policies specify one or two risks they will cover, while multi-peril crop insurance usually protects a variety. 

2) Regional weather patterns

This extends beyond the climate your farmer works in. It's also about knowing what's happening this season, and what could affect this year's crop. Unusual weather can delay planting or harvesting, which in turn can impact the success of the crop. Each year's policy should reflect current conditions.

3) Local factors and risks

Some insurance also covers issues such as burglary, theft, employee dishonesty, replacement keys and other security. They may also cover problems caused by nearby farms, such as chemical overspray or escaped livestock. Each farm will assess this type of risk differently so it's important that you have a conversation with each farmer you work with about their individual needs.

4) Type of crop

Most of Australia's farm insurance policies are specific to the crop. Different types of crop are more or less affected by certain types of conditions or perils. Some crops are more hardy to pests than others, while some can cope with heat better. Additionally, each type of crop requires a different level of investment, both financially and in terms of time, that the farmer will want to see that adequately covered.

Some policies recognise the property and machinery used with specific products, or costs associated with replanting.

Farmer growing crop in a greenhouse covered by tailored insurance.Farmers who rely on greenhouses need crop insurance that covers essential buildings.

5) Farming practices and essential components

Greenhouse insurance covers the packing sheds, cool rooms and other building structures that are integral to the operation, for example. For some farmers, this will be essential, because damage to their property or machinery could significantly reduce their crop yield. Not all agricultural policies look beyond the crop.

At Primacy Underwriting we pride ourselves on products built with the needs of Australian farmers in mind. We work with brokers and insurance agents to provide the right coverage for every farmer. Get in touch with our team today.