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Multi Peril Crop Insurance
Federal Minister of Agriculture Warren Truss described insuring crops as a “risky business”, and added that, “Although many believe there are few real impediments to insurers offering broad based crop insurance, the insurers themselves usually maintain that it isn't commercially viable.” Where harvest protection is available, conditions can vary, but the following probably won’t be covered:
- Loss of quality of seeds, plants or material
- Loss of germination ability of seeds
- Loss of yield due to presence of uninsured species of plant/weed
- Intentional damage
- Destruction or loss caused in connection with a political or civil riot or commotion
- Crop failure caused as a result of excessive growth of weeds or poor management practices
The “insured” will almost always be the person, partnership or company whose name is set out on the policy and one stipulation may be that all fields of insurable crop have to be insured in order to receive the full entitlement under the policy.
Harvest protection policy terms
Where you do not insure all of your crops, you must provide a crop insurance plan with your crop insurance proposal that clearly identifies all insured and uninsured crops grown on the property. It’s important that you don’t under-insure your crops when nominating a yield at the final revision. Cover will usually start at the first emergence stage of a flowering plant with two seed leaves (called “dicotyledonous”) or a flowering plant with one seed leaf (called “monocotyledon”), or at the “panicle initiation” for rice.
Policies will also generally be subject to a 48-hour acceptance condition, which means that for any proposal or revision advice you send the insurance company, the cover (or changes to the cover) will not commence until 48 hours after 4pm on the date that the company accepts the proposal or revision advice.
Crop insurance providers
NRMA and Allianz offer crop insurance (the former via NRMA Farm Insurance plans), as do most insurance companies, with all having certain special conditions, usually including:
- The ability to cancel your cover in the event of crop failure, if before the final revision date
- The chance to avoid paying premiums if you tell your insurance provider about crop failure before the final revision date provided you have not already made a claim. If you have made a claim, premiums will be based on a yield of 0.5 tonnes per hectare
- Limitations regarding premiums, including no reduction if crop failure occurs after the final revision date
- The requirement that you supply your insurance company with an insured yield and insured value for each crop at the start of each season
- The requirement that you tend to the crop during growth, harvesting, storage, or transit in a manner consistent with generally accepted farming practices and procedures
Speak with your insurance provider personally to check how certain terms and conditions will apply to you, but this rough guide will allow you to better understand what to expect from a crop insurance policy. Protecting yourself against damage to your harvest crops is bound to be more specialised than cover for some businesses, with product more precariously in danger, openly facing the elements. However, with the right advice from a specialised broker having the necessary experience, crop insurance needn’t be a mine field.
