Farming has always been important in enabling humanity to enjoy the privileges many take for granted. Humanity still relies heavily on agriculture to feed the ever-growing human population that has recently crossed the eight billion mark. In most cases, ideal conditions do not cause any hindrance to farming practices, but this is not always the case.
Unfortunately, there is no shortage of instances where farmers lose all their produce due to uncontrollable natural phenomena such as fire or hail. This can leave farmers in great peril and have a rather devastating impact on the global food supply. Hence it only makes sense that farmers take preemptive measures to prevent these losses or at least mitigate their impact.
But how? Crop hail insurance is the answer you are looking for. But what is crop hail insurance all about? Let's dive in and find out.
First, What Exactly Is Crop Hail Insurance?
Crop hail insurance is a unique form designed to offer farmers coverage for destruction and damage caused by fire or hail. Farmers purchase these insurance policies to protect their agricultural products while they are yet to be harvested. This makes it clear that crop hail insurance claims are limited till the period your crops are still on the field.
These insurance policies significantly protect farmers' livelihoods who fall victim to adverse weather events destroying and damaging their crops. It is worth noting that hail here is singled out since it has the potential to damage farmland significantly. Crop hail insurance will reimburse a farmer for the value of agricultural produce while still on the field.
How Does Crop Hail Insurance Work?
One of the most noteworthy characteristics of crop hail insurance is its ability to cover damages that exceed physical damages caused by a hailstorm. These insurance policies are also designed to ensure coverage for damages caused by fire. Furthermore, crop hail insurance might also offer coverage for losses caused by wind, malicious thieves, lightning, and vandalism based on your region and country.
But farmers must remember that crop hail insurance policies are not designed to cover damages caused by weather-related events such as drought, sudden frost, or increased moisture. Also, crop hail insurance policies do not offer any coverage for losses farmers encounter in the case of a price drop, which is relatively common in many parts of the world.
The overall procedure of crop hail insurance is rather simple since farmers need to start with selecting a dollar amount of coverage. This will be followed by selecting options with varied deductibles to help them partially self-insure while paying lower premiums.
Farmers will receive the coverage based on the acre-to-acre calculator to ensure they get coverage for only the damaged parts of the fields. This means if a certain area of the field has not been affected, the farmer will not receive any compensation for the same.
This also works in favor of farmers since they don't need to buy a crop hail insurance policy for the entire farm. Instead, they can spend on specific areas with higher risks and more susceptible to damages from fire or hail. But you must remember that buying coverage for specific areas means you cannot transfer or extend coverage to another area after finalizing the policy terms.
Crop hail insurance policies only offer coverage based on the expected value of the crop covered under the policy terms. Your insurance providers will calculate the coverage value based on a dollar-per-acre system. But farmers can choose this value before they purchase their crop hail insurance policy.
Why Should Farmers Get Crop Hail Insurance?
Farming is one of the riskiest occupations, given no one can predict weather phenomena with the utmost accuracy. This often leaves farmers vulnerable to adverse weather phenomena such as hail or fire, causing irreversible damage to their crops and produce.
But crop hail insurance can help soften the blow and make things more manageable in such adverse situations. That said, here are some important reasons justifying why farmers should get crop hail insurance.
Lowering Farmer Debt
No matter how technologically advanced a nation might be, it is still heavily reliant on its farmers to feed its population. While this should keep most farmers rich and debt free, the reality contradicts this. Most farmers become indebted to varied agencies, especially after losing their agricultural produce to hail or fire.
A crop hail insurance policy can help farmers get coverage for their losses, further preventing them from succumbing to debt. Instead, farmers can use their coverage to pay off their debt and gear up for another year of fruitful produce.
Ensuring A Stable Income
A farmer's income is anything but stable, with numerous variables potentially changing things drastically without warning. There have been many such cases when farmers lost their income for an entire agricultural season due to unanticipated weather phenomena. As a result, farmers tend to lose their income, further pushing them towards debt.
But fortunately, crop hail insurance policies can prevent farmers from losing their stable income even in the most dire situation. This means if a farmer happens to lose their crops in a field due to hail or fire, their policy will cover the losses. This instills stability in the entire mechanism and ensures farmers do not default on their loans and borrowings.
Easier Adoption Of New Agricultural Practices
The final rationale for farmers to invest in crop hail insurance is to sustain the ability to adopt new agricultural practices. When farmers are certain their crops are insured with a crop hail insurance policy, this instills economic stability.
This stability then helps farmers explore new and better ways to enhance cultivation and boost productivity. Besides that, it also encourages farmers to experiment with new tactics to protect their agricultural produce better.
Conclusion: To Sum Up!
Farmers play a very important role in supporting the economic growth of any nation. Therefore, ensuring farmers and their products get the financial protection they deserve is important. This becomes more important for farmers in areas more prone to hail or fire. The best way to deal with this is to get a crop hail insurance policy and invest in a more secure future.
