New agricultural insurance for broadacre crops – Weather Index Insurance
Published 30 July 2020
Australian broadacre crop growers face one of the riskiest environments in the world, with climate change set to deliver increases in the frequency and severity of extreme weather events. Following the withdrawal of most multiperil crop insurance products over the last 2 years, growers have been left exposed to a variety of risks. Now a new form of protection, Weather Index Insurance, has become available.
Traditional crop insurance previously on the market was limited to certain types of crops and risks, restricted to specific regions and capped amounts of payouts.
Provided by Crop Risk Underwriters (CRU), Weather Index Insurance is a more flexible and objectively based form of cover.
“While multiperil crop insurance has all but gone from the Australian market, we are now seeing the emergence of parametric solutions such as Weather Index Insurance.”
John van der Vegt, AgriRisk National Head of Agriculture
“These products are readily available overseas and are now being adapted to the local market. The benefits to farmers are that they can be tailored to cover temperature and rainfall extremes, which are the largest contributors to yield variability for Australian broadacre growers”
Accurate basis for claims
Unlike traditional crop insurance there are no exclusions on types of crops and the risks that can be insured. The claim is activated by a specified trigger such as rainfall measures or temperatures in your area during your nominated risk period.
This weather data is based on official meteorological records in your measurement point location which is set using global positioning satellite technology.
No onsite inspections are required since the weather index metric is the claim trigger. Once the trigger is met your loss is settled on a pre-agreed basis or value.
You choose the weather risk, location and period of cover
As well as precisely where you want your crop cover you can also specify when during your crop cycle you need your insurance to apply, so you can protect your crops from the applicable risks.
Weather Index Insurance is ideally suited to covering
frost at flowering or other temperature extremes that could impact crop yield
excessive rainfall at harvest time which could negatively impact yield and quality.
“After rainfall, frost is one of the most significant risks that can impact yield on broadacre crops,” van der Vegt says. “With the introduction of Weather Index Insurance, growers can now tailor a simple protection to safeguard their revenues from frost.”
You can protect some or all of your crop revenues for the period when your crops are most vulnerable to your selected weather risk.
You select the measurement point, which can be the closest Bureau of Meteorology station, the 5 square kilometre spatial grid your crop is located in or a surrounding grid.
You choose how much cover you need
You can choose the amount of cover you require, which can be geared to a yield or quality loss of some or all of your crops, a production cost or simply a lump sum ‒ it’s up to you.
Claims are paid on this pre-agreed basis. The only preconditions are that you must have held insurance cover for 30 days before you can claim during the risk period specified, and have paid in full 7 days prior.
Why CRU Weather Index crop insurance?
All crops covered
Claim triggered by independent data
Applies to specified location and period of crop cycle
You nominate loss value and basis
No inspections or loss adjustments required
Want to know more?
If you’d like to explore further information and watch a video that profiles Weather Index Insurance go to our Weather Index Insurance page.
You can also talk with one of the Gallagher AgriRisk specialists. With 25+ years in the agricultural sector you can count on in-depth understanding of your operation and needs.
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