Frost, rain, hail, heat waves… Professionals in the agricultural sector continue to look at the sky, but each time with less fear. Agricultural insurance is becoming more popular among the agricultural entrepreneurs who are not resigned to the fact that all their investments and work depend on factors as uncontrollable as the weather, pests and other adversities.
More policies, more hectares insured
One piece of data corroborates this trend: in 2020, the policies of this type of insurance amounted to 416,000, 5% more than in the previous year. In addition, the insured area increased by 23%, reaching 7.8 million hectares.
A solution for every crop
Agricultural insurance aims to protect agricultural, forestry or livestock holdings from the risks that threaten them, which can be of several types:
- Combined insurance This covers the damages caused depending on the location of the farm, the type of crop grown, etc. Coverage can include fire, cold drop, frost, rain, snow, hail, wind, etc.
- Yield insurance This covers the loss of yield that can occur due to any adverse weather conditions and cannot be controlled by the farmer, including drought and frost. This type of insurance usually includes a series of guarantees based on a specific crop: for example, there are yield insurance policies for olive groves, almond groves, and so on.
- Comprehensive insurance This covers the loss of production caused by phenomena that cannot normally be controlled by the farmer, such as hail, fire, drought, etc.
Livestock insurance covers damages related to the climate or other exceptional phenomena such as accidents and animal diseases; the compulsory slaughter of animals; the expenses associated with the destruction of carcasses, and damage due to drought in pastures.
More and more farmers and livestock ranchers are viewing agricultural insurance as just another production cost in their operations, and they have incorporated it into their day-to-day working practices as a necessary expense like fertilizer, feed or diesel. The consequences of the recent storm Filomena are a good example of the need to have coverage for unexpected and unforeseeable damages. The most badly-affected crops were winter vegetables, such as lettuce, artichokes, cauliflower and broccoli, in addition to citrus fruit, permanent crops, and shrubs, all of which suffered from the weight of the snow.