When you rely on crop yield, insurance protection is vital. But traditional farm insurance may not cover some of the threats farmers face, and that's why it pays to invest in the broader cover provided by multi-peril crop insurance.
Traditional farm insurance provides for restoring crops after a major natural disaster such as fire or hail. But crop damage can occur as the result of lesser threats such as frost, drought, wind and depredation by wildlife. That's where multi-peril crop insurance (MPCI) comes in.
Multi-peril crop insurance provides cover for a variety of different crops and their vulnerabilities, as well as different perils, which may differ from policy to policy and can include the traditional threats like fire and hail. This is where a broker's expertise can be invaluable in selecting the right insurance products and policies.
"MPCI is something that farmers should definitely consider over the long term,” advises Kylie Hull, Gallagher Area Director – Dubbo.
"It's a relatively new product in Australia but has been offered around the world for some time. With its wider coverage than traditional crop insurance policies, it can position farmers meet a greater range of risks."
There are two types of MPCI policies, based on either crop revenue or yield, and both include different crop types and perils that can be covered, enabling flexibility and a broad range of cover. Because MPCI is more expensive than traditional cover farmers needs to consider it as an investment that can provide increased support through challenging times.
According to the December 2018 Australian Bureau of Agricultural and Resource Economics and Sciences crop report, 2018-19 winter crop production is forecast to decrease by 23% to 29.3 million tonnes, 20% below the 20-year average to 2017.
"With 2018 a particularly bad year for drought across large parts of the country, MPCI could have helped farmers bounce back from a tough year," Hull points out.
Talk to a Gallagher farm insurance specialist in your area to find out how MPCI could help you protect your crops and future-proof your livelihood.