Recent natural disasters; the fires in Vryheid and Knysna; floods and droughts have had a significant impact on farmers.
These disasters also brought a dreaded message to many insurance policyholders – you are underinsured or not covered at all for that particular item.
According to research conducted by CIB Insurance Solutions (CIB) in 2010, underestimating the replacement value of farm equipment, combined with the failure to regularly review their policies, means that almost all of South African farmers are underinsured. Some as high as 70% underinsured.
Unfortunately, if you have insurance but the items are not insured at replacement value, or in some cases specified on the policy, you would have to pay a partial cost or the full cost to replace the items.
The study has found that farmers tend to reduce monthly business costs by cutting their’ spend on insurance, thus causing the problem. This provides short-term relief, but in the long term, the farming operation could suffer severe losses.
When it comes to crop insurance, your need for insurance differs significantly from season to season, the type of crop, weather conditions and the farmer’s financial position.
It is important that your broker make you aware of the risks you face and the product on offer, to mitigate those risks while being able to afford them.
The benefit of approaching an independent insurance broker such as NNIB, is that your solution is tailor-made. It is not a one-size-fits-all solution. We propose a product appropriate to your needs, whilst reducing the potential risks to your business.
NNIB offers a free service where we review your policy with you, ensuring that you are ensuring the right items, at the right price, and for this season.
Make an appointment with NNIB today!