Farming insurance is not a one size fits all policy

As we are getting into the 2017-18 farming season, farmers are likely to secure general farming insurance and assume that the policy will address all their risks. Nonetheless, these policies will not always be befitting for the risk scenario of each farmer. There could be circumstances were the protection implied by the farmer is not even provided for by the policy they take. The biggest mistake you can make as a farmer is to think that every type of crop or livestock policy will work equally well for everyone. You should commit your time and effort to searching out and understanding the best policy for you and negotiating for conditions that best suit your farm. It was all going to be easy if a one size policy could fit all but unfortunately that is not the case, so you would want the size that fits you.

Here are some reasons you should have your farming insurance tailor made

Different types of  insurance – you need to get information on how different types of farming insurance work in order to make the right decision. It is irresponsible to get one type of insurance without understanding the other.

Livestock insurance – It is essential and recommended for farmers raising animals commercially to manage risks by having livestock insurance. Animals covered by livestock insurance include but are not limited to cattle, pigs, sheep, goats and horses. Livestock insurance on its own is also not a one size fits all as it comes in different types. There is comprehensive coverage were several types of animals are covered under a policy and there is individual policies where there is individual cover for a specific type of animal. You can further customize the policy depending on the particulars of the farm for example having individual cover for your pure breed Brahman that costs $5000 each and having a blanket cover for the rest of the animals under a maximum coverage of $500 per animal. Common causes of loss covered by this policy are death of animal by fire, lightning, falling objects, explosion, electrocution, drowning, floods, snake bites and theft.

Poultry Insurance – Poultry are normally insured separately from livestock. This type is applicable to farmers who have layer birds, broiler birds and other types of poultry. Under this type of insurance there’s is usually a minimum number of birds required for you to be able to take the insurance. The policy usually covers for death of birds due to fire, lightning, floods, cyclones, storm, tempest, theft, diseases contracted during the period of insurance. This policy can be customized to include cover for the growing facilities of the poultry and liabilities that might arise as a result of the operations of the farm.

Crop Wind and Hail insurance – This insurance covers and is limited to crops in the field only. It covers loss of the crop due to wind and hail. It is probably suitable for famers on a budget and who cannot afford to insure more risks.

Crop Field to Floor – This type of insurance covers for standing crops at the farm through to harvest until the crop reaches the market. The policy usually covers for loss of the crop due to drought, hail, fire, windstorm, excessive rain, uncontrollable pests, and diseases when either the crops is still growing, being harvested or in storage or in transit to the market place. You can also customize the policy to cover downgrading of quality of the crop as a result of the insured risks.

Weather Index Insurance – This is a fairly new type of insurance in Zimbabwe. It deals with the risk of adversely changing climate trends. It is an index based insurance and covers losses to the crops occurring due to varying weather conditions such as temperature, wind speed, rainfall, humidity etc. This policy usually covers diminished yield/output due to deviation from optimum weather requirements for crops within a specific geographical location and specific time period.

Needs differ – As a famer in a cold area you might need crop insurance that covers for frost more than a famer in a hotter area. A farmer who has irrigation is not much interested in weather index insurance than a farmer who does not have irrigation because of their better control of the water requirements of the crop.  The logic here is that there is no point getting insurance that is not covering the risk that you need the most protection from. It is therefore advisable to find a flexible insurer capable of tailor making your policy to your needs rather than going for a one size fits all.

Negotiation is always open - One of my bosses, from Nigeria, told me that the difference between Zimbabweans and Nigerians was that Nigerians are always looking for a bargain. Nigerians can negotiate and get a discount everywhere they go. If you don’t have the same attitude when shopping for insurance you are either going to be forced to wear an oversized insurance policy or an undersized insurance policy. You should guard your interests, cut costs and maximize your profits as a farmer. If you are paying more than you should for your famers insurance it’s your own fault.

The reason for purchasing insurance is to be protected from your greatest risks, if those risks are not protected then the true purpose of insurance falls off. It does not matter what type of insurance you are shopping for, listing your needs, and risks and doing your homework before you made the final purchase is critical. If you are not sure it is better to look for an insurance professional to help you made a decision. There are many options including insurance consultants, agents, aggregators and brokers to help you make the best decisions.