In the weeks following the November 11 hailstorm there was much talk of insurance. The event was proclaimed as the most damaging such event in living memory. Despite the scale and fury of the storm, the number of growers who suffered loss was relatively small Regrettably but unsurprisingly, the majority did not have insurance to cover the financial losses; premiums are beyond the reach of most.
Hail is just one of the agricultural risks most irrigators are exposed to. Others include frost, fire, smoke taint, extreme heat, flood, and extreme wind, such as that which ‘blew away’ selected Renmark growers a decade ago. Premiums, relative to returns over the past decade, have been unaffordable albeit that growers understand agricultural risk and the wisdom of being covered. In a curious twist, it seem seems broadacre farmers are much more likely to be covered for such events.
It’s a vexing issue. Riverland Wine initiated inquiries about multi-peril insurance through local brokers. All were keen to assist but limited in terms of the resources needed to undertake the actuarial work necessary to assess comprehensive cover for multiple perils. Through the Association’s work with the PIRSA Hailstorm Recovery Group, we’ve been able to escalate the matter to the Insurance Council of Australia for higher level consideration. The concept involves the possibility and likelihood of all farmers and producers across the region being able to ‘opt-in’ to a scheme to cover such risks; the rationale being that if a much larger number of producers could afford cover, then perhaps the premiums could be reduced, given that the probability of ‘an event’ would remain constant.
There’s no doubt that if there could be such a system, everyone would stand to be a winner with much less of a burden on those impacted and much less of a burden on tax-payer funded ‘relief programs’. Watch this space.