Getting The Most Out Of Agricultural Insurance

In recent years the strength of the rand combined with production surpluses, has put immense pressure on agricultural profits. This has resulted in many farmers cutting costs by reducing insurance cover or cancelling policies altogether. Although reduced cover may provide some shortterm relief, it also reduces a farming enterprise’s capacity to recover from large financial setbacks.

Seeing as most farmers are not insurance experts, consulting with a broker and conducting annual risk assessments to establish what needs to be insured is crucial to managing risk successfully. By updating insurance policies annually, farmers can eliminate the possibility of being underinsured as many farmers tend to undervalue building and production structures.

Lowering your premium

Hanlie Kroese, business development manager at Santam, says lowering insurance premiums still beats not having any insurance at all. Farmers who are contemplating a lower premium should keep the following insurance tips in mind:

• Avoid unnecessary claims by implementing good risk management practices.
• By carrying the financial responsibilities for certain risks themselves, farmers can lower their insurance premiums. However, insurance should still be considered if there is enough disposable income to cover the monthly premiums.

• Premiums are usually adjusted downwards if you do not claim for a year.
• Farmers can save more in the long run by re-assessing risks annually.
• Join the Fire Protection Association of South Africa (FPA). Many insurance companies offer discounted rates and other rewards to farmers who proactively reduce and manage risk.

Solar panels and goods in transit

Hanlie explains that farmers should be more aware of items that are insured separately. Solar panels are only insured along with a building if it forms part of the building’s fittings or fixtures. If a solar panel is separate from the building and not fitted to the building site, it will have to be insured separately.