Farm Insurance :: News
SHARE

Share this news item!

Insurance that pays out as soon as extreme weather hits sounds appealing

Insurance that pays out as soon as extreme weather hits sounds appealing

Australians could soon see a new type of insurance that would pay out as soon as extreme weather hits.

Many victims of last month's floods in Australia had no insurance whatsoever, and the assessment of damage was agonisingly slow.

Secondary perils, such as flood, are a global trend in the insurance industry, characterized by localized, sudden and intense weather events.

Climate change has resulted in Australia being increasingly vulnerable to extreme weather conditions. This in turn exposes the country to financial risk and we need therefore seriously think about how to manage the financial risk of a secondary peril.

Weather index insurance is a new form of insurance that uses automatic payments to make it easier for both victims and insurers. It has been deployed in remote parts as Paraguay and Mongolia — and could work here too.

Weather Index Insurance

After an event, insurance companies assess damage and how the money will be distributed. This often requires victims to accurately record everything they experienced so they can make a claim. The sheer number of people who experience these events can lead to long wait times while they wait to receive their funds.

But weather index insurance, sometimes just called weather insurance, is paid when an index is reached. For example, if a certain flood level has been passed or if rainfall reaches a low point.

Insurance against fluctuating weather conditions has been trialled by farmers in remote parts of developing countries to insure crops, although it is yet to be tried on property insurance.

It's hard for insurance assessors to make the long trip out to the steppes of Mongolia or floodplains of Bangladesh to assess damages from extreme weather, but advances in remote sensing and satellite technology can help determine whether or not extreme weather has occurred.

The payouts for Weather Index Insurance are automatic and fast. When a weather event is recorded, farmers receive their money even if the crop remains unharmed. This gives the farmer an incentive to make the best decisions when it comes to ensuring that his crops survive with little damage.

Weather insurance is a kind of crop insurance that helps farmers in remote areas. The weather index is linked to specific crops and their growing conditions. This way, the weather company can predict the level of losses.

Weather index insurance has shown promise in global trials and been found viable by Australian researchers. While it is not yet widely adopted, a number of farmers have recently taken up the option.

Australian insurance providers like CelsiusPro, for example, has worked with the World Bank and other aid organisations to bring weather policies to communities in the Pacific.

Published:Wednesday, 18th May 2022
Source: Paige Estritori

Share this news item:

Insurance News

Insurers Bet Big on AI for Streamlining Claim Resolutions Insurers Bet Big on AI for Streamlining Claim Resolutions
28 Mar 2024: .Paige Estritori

Australia's insurance sector is witnessing a transformative embrace of artificial intelligence (AI), with a sweeping 90% leaning on, or on the cusp of adopting, chatbots and advanced AI to enhance claim handling, as noted in Gallagher Bassett's yearly analysis. This heightened integration reflects the sector's aim to bolster operational speed and efficacy, with a remarkable 98% of insurers predicting immense benefits from such advancements. - read more
Spike in Weather-Related Insurance Claims During Summer Revealed Spike in Weather-Related Insurance Claims During Summer Revealed
27 Mar 2024: .Paige Estritori

Over the recent summer period, NRMA Insurance reported an influx of claims linked to severe weather, with a record not seen since the autumnal months of 2022. An overwhelming number of these, about 85%, have been ascribed to weather disturbances such as storms and hail, per the updated Wild Weather Tracker statistics. - read more
Federal Court Upholds Insurer's Policy Update Clause Federal Court Upholds Insurer's Policy Update Clause
26 Mar 2024: .Paige Estritori

The Federal Court has provided a green light to Auto & General’s home and contents insurance policy terms, confirming the necessity for policyholders to inform the insurer about significant changes affecting their coverage. The company emerged victorious in a legal scrutiny instigated by regulatory body ASIC over the disputed clauses. - read more
Survey Reveals Time Crunch for Brokers Facing Compliance Hurdles Survey Reveals Time Crunch for Brokers Facing Compliance Hurdles
25 Mar 2024: .Paige Estritori

Steeped in administrative duties, brokers are dedicating over three hours daily to data processing tasks, finds a survey issued by an insurance software company. Further intensifying their plight, nearly one-fifth have reported growing complications and time expenditure in compliance adherence, underlining a pressing industry conundrum. - read more
Revolutionizing Carbon Trading with Novel Insurance Offering Revolutionizing Carbon Trading with Novel Insurance Offering
24 Mar 2024: .Paige Estritori

In an innovative move within the environmental finance sector, CFC has introduced a cutting-edge insurance product specifically targeting the burgeoning carbon credit market. This pioneering Carbon Delivery Insurance is designed to mitigate the risks associated with non-delivery of carbon credits, reinforcing market confidence and integrity. - read more
Strata Firm Commits to Transparency After Fee Backlash Strata Firm Commits to Transparency After Fee Backlash
24 Mar 2024: .Paige Estritori

In a decisive move to restore confidence among their clientele, Netstrata, a prominent strata management firm, has indicated intentions to initiate a voluntary evaluation of its business protocols with the assistance of the New South Wales Fair Trading authority. This proactive step emerges in the shadow of a critical exposé by the ABC regarding alleged overpriced insurance fees imposed on condominium proprietors. - read more
Farm Equipment Finance & Loans
Looking for the best way to finance your Farm Equipment? Well, you need look no further! Simply submit our 2-minute business loan enquiry form … and we'll help get you qualified for the best rate Plant & Equipment loan available from our national panel of independent business finance brokers. We also have access to the best rates & options for Business Cashflow finance.



Farm Insurance Articles

Agribusiness Risk: Liability Issues Facing Australian Farmers Today Agribusiness Risk: Liability Issues Facing Australian Farmers Today
The agricultural sector in Australia carves a significant portion of the country's economy, contributing to its GDP and providing employment across rural and suburban areas. Thus, navigating the complexities of agribusiness is not just a matter of crop cultivation and livestock management, but also of understanding the intricate web of liability risks that come with the terrain. - read more
Livestock Insurance for Aussie Farmers: What You Need to Know Livestock Insurance for Aussie Farmers: What You Need to Know
Livestock farming is a significant part of the Australian agriculture industry. As with any business, farmers face numerous risks such as disease, death, theft or extreme weather events, which could cause damage or loss to their livestock assets. Livestock insurance provides cover against these risks, ensuring that farmers are financially protected from any potential financial losses, which could devastate their livelihoods. - read more
Preparing for the Worst: Developing a Comprehensive Disaster Response Plan for Your Farm Preparing for the Worst: Developing a Comprehensive Disaster Response Plan for Your Farm
As a farmer, you know that unexpected events can have a significant impact on your farm and your livelihood. Natural disasters, such as floods, fires, droughts, and storms, can occur at any time and have devastating consequences. That's why it's crucial to have a comprehensive disaster response plan in place to protect your property, assets, and, most importantly, your loved ones and livestock. - read more
Is Your Farm Under-Insured? Tips for Assessing Bushfire Insurance Adequacy Is Your Farm Under-Insured? Tips for Assessing Bushfire Insurance Adequacy
The threat of bushfires looms large over the vast expanses of rural Australia, shaping the reality of farming in this sunbaked landscape. The risk, always present, escalates as the climate warms and dry conditions persist. It's not a matter of if, but when the land will be tested by fire's wrath. In this environment, the armor of insurance isn't just recommended; it's critical for survival. - read more
What You Need to Know About Crop Insurance for Your Farm What You Need to Know About Crop Insurance for Your Farm
Farming is a risky business. As a farmer, you are at the mercy of the weather, pests, and other challenges that can threaten your crops and your livelihood. That’s where crop insurance comes in. Crop insurance can provide financial protection in case your crops are damaged or destroyed, allowing you to recover from losses and move forward with your farm business. - read more
How to Save Money on Your Farming Insurance Premiums How to Save Money on Your Farming Insurance Premiums
When looking for farming insurance, it is important to shop around for the best deals. Don't simply rely on the first insurance company that you come across. Take the time to research various companies and their policies. Compare them based on their coverage, premiums, and deductibles. - read more

Need a Quote?
Start your free farm insurance quote comparison here.
Farm Type:
Postcode:

Knowledgebase
Insurance Deductible:
the amount that an insured is required to contribute toward an insurance claim as stipulated in an insurance policy. Otherwise known as the "policy excess".