Crop insurance for Australian growers
Fire or hail can damage months of work and a significant part of a farming business's seasonal income in a short period. RMA Insurance Brokers helps Australian growers review crop values, seasonal declarations and the insured events available through suitable crop insurance markets.
Crop insurance at a glance
Crop insurance protects the financial value of nominated crops against selected insured events during the insured period.
The crop type, paddocks, hectares, expected yield, insured value, insured interest and chosen policy structure may all affect the arrangement. How cover is built varies between insurers, so the schedule, wording and seasonal declarations determine what is insured.
Key areas
- Broadacre crops
- Fire and hail
- Crop areas and values
- Seasonal declarations
- Additional benefits
- Cover limits and excesses
Who should consider crop insurance?
Crop insurance may be relevant for farming businesses with a significant financial exposure to seasonal cropping, including:
- broadacre grain growers
- oilseed and pulse producers
- winter cropping operations
- summer cropping operations
- mixed farming businesses with a substantial cropping enterprise
- larger agricultural operations with substantial seasonal input costs
- sharefarming arrangements
The value at risk can change considerably between seasons. Crop mix, planted area, seasonal conditions, expected yield and commodity values can all move the financial exposure.
Many cropping businesses also run stock alongside the program. Where breeding animals or higher-value stud stock form part of the operation, livestock and stud stock insurance is generally considered separately from the crop arrangement.
Specialist crops may require different products or policy structures rather than being included within a standard broadacre crop arrangement. Current specialist agricultural markets separate broadacre products from areas such as cotton, viticulture and fruiting trees or vines.
What can crop insurance cover?
Australian broadacre crop insurance is generally built around the insured events shown in the schedule. Cover may be arranged for fire only, or for fire and hail together, depending on the insurer and policy selected.
Only the insured events shown in the schedule apply; other causes of loss should not be assumed covered unless they are expressly included. The crop areas, cover period, limits and excess should be confirmed from the schedule.
Crop insurance policies vary between insurers, so cover should always be checked against the particular policy wording, schedule and declarations applying to the season.
Depending on the policy arranged, the following areas may be relevant.
Fire and hail
Cover may apply to loss of potential yield caused by insured fire or hail events during the insured period.
The crop, paddocks, cover period and selected insured events must be shown correctly in the policy documents.
Chemical or spray drift
Some policies may provide limited cover for crop damage caused by chemicals drifting from specified third-party spraying operations.
Strict conditions may apply, including the source of the spraying and identifying the responsible party.
Straying livestock intrusion
Some policies may cover loss of potential yield caused by someone else's livestock entering the insured crop.
Fencing, gates, ownership or control of the livestock, and identifying the responsible party may all affect the cover available.
Harvested crop and storage
Some policies may provide limited cover for harvested grain, seed or hay while it is still in a harvester, awaiting storage, stored in an eligible silo or building, or temporarily stored away from the insured property.
Not every storage method or cause of loss is covered, so the eligible locations, limits and conditions should be confirmed from the schedule.
Harvested crop in transit
Some policies may provide limited cover while harvested crop is transported to storage, a receival point, a processor or a seed-cleaning facility.
The vehicle used, load security, route, loading and unloading, and the causes of loss covered vary between policies.
Claim mitigation and firefighting costs
Some policies may contribute to reasonable costs approved by the insurer or loss adjuster to reduce an insured loss. This may include replanting-related costs or firefighting expenses.
Approval requirements, limits and excesses differ between policies and should be confirmed before costs are incurred where possible.
Additional benefits are not identical across insurers. They may have separate triggers, excesses and sublimits, and some policies also apply an overall aggregate limit across all additional benefits.
Some policies provide further extensions for harvested-crop and mixed-farming exposures. The available benefits, conditions and limits vary considerably between insurers.
Crop areas, values and claim calculations
Accurate crop areas, paddocks, yield, insured value and financial interests matter because claim-calculation provisions vary materially between policies.
The following principles apply across most crop insurance arrangements:
- insured paddocks and crop areas must be identifiable
- sharefarming and other financial interests should be disclosed
- underinsurance, area definitions and other claim-calculation provisions may reduce a settlement
- policies may apply excesses differently across paddocks, crop areas or claim units
- the applicable calculation must be confirmed from the wording and schedule
Information needed for a crop insurance review
Crop insurance relies on accurate seasonal information. When RMA Insurance Brokers approaches insurers, the information requested may include:
- farming entity and property details
- crop types and paddock locations
- hectares planted
- expected or insured yield
- insured value
- the share of the crop to be insured, including any sharefarming interest
- how the crop is intended to be used, such as grain, seed or hay
- selected excess
- previous crop losses or known damage
- sharefarming and other financial interests
- storage and transit arrangements where relevant
Requirements vary between insurers and products. Providing this information clearly at the outset helps establish the correct basis of cover.
Timing, declarations and renewal structure
Crop insurance does not follow one universal renewal process, so the structure of your policy should be understood before the season begins.
- some policies are season-specific and end at expiry, requiring a new proposal
- other policies may continue through an annual crop declaration process
- either structure requires fresh crop, yield and value information each season
- deadlines for declarations and revisions vary between insurers
- increases in cover may not take effect immediately
- crop failure or substantial changes should be reported before the applicable cut-off
- harvesting or a claim may restrict later changes to insured yield or value
Missing a required declaration or relying on outdated information may affect how the policy operates at claim time.
When should crop insurance be reviewed?
Crop insurance should be reviewed each season and whenever there is a material change to the cropping program. A review is particularly worthwhile:
- before the new cropping season begins
- before declaration or revision deadlines
- when the crop mix or cropping hectares change
- when paddock boundaries or insured areas change
- when entering or leaving a sharefarming arrangement
- when the crop purpose changes
- when storage or transit arrangements change
- when crop failure or existing damage becomes apparent
- when expected yields, crop values or the proportion insured change materially
- before harvest if yield or value information has materially changed
Seasonal conditions can change quickly, but changes to the crop do not automatically change the insurance. Required revisions or declarations need to be made in accordance with the applicable policy.
What may not be covered?
Crop insurance only provides the cover described in the particular insurance contract. Every policy contains exclusions, limits, excesses and conditions.
Depending on the policy, cover may not apply to:
- events not shown as insured events
- damage occurring before cover commenced
- known or pre-existing crop damage
- uninsured crops, paddocks or financial interests
- losses within the applicable excess
- failure to meet declarations or policy conditions
- drought, frost, disease, weeds, pests or excessive rain unless expressly covered
- loss caused by excess or insufficient water or moisture
- wind or water damage, including water resulting from melting hail, unless expressly covered
- loss of quality or grade
- loss of nutritional value
- loss of germination ability
- contamination, unless a specific policy benefit applies
- consequential financial loss
- buyer or delivery-site rejection unless expressly covered
This is not a complete list. The policy wording, schedule, declarations and endorsements determine what is insured and the conditions applying to a claim.
Example: hail damage before harvest
Illustrative example
A broadacre farming business declares its canola paddocks, hectares, expected yield, insured value and financial interest under the selected policy structure.
Hail damages several insured paddocks shortly before harvest.
The grower contacts RMA Insurance Brokers promptly. The insurer may appoint a crop loss adjuster, and the grower follows instructions about inspection, harvesting, representative sample areas and retaining standing stubble.
The claim is assessed against the insured event, affected crop area, seasonal declarations, insured yield and value, applicable excess and the policy's claim-calculation provisions.
The insurer determines whether the claim is covered and the amount payable.
Our article on what to do in the first 48 hours after an incident covers the steps that help a claim progress smoothly.
Example provided for general illustration only. Policy coverage and the amount of any claim depend on the insurer, policy wording, insured values, declarations and the circumstances of the loss.
Crop insurance across rural and regional Australia
RMA Insurance Brokers works with growers, farmers, agribusinesses and regional businesses across Australia. We also work closely with rma network Livestock & Property Agents, providing connections with cropping and mixed-farming communities throughout regional Australia.
Our services are not limited to rma network Members or any particular region. Growers and farming businesses across Australia can contact RMA Insurance Brokers for crop insurance assistance.
Why RMA Insurance Brokers?
Crop insurance involves more than selecting a dollar amount. The crop, paddocks, hectares, values, seasonal timing, declarations and policy structure need to be considered together.
RMA Insurance Brokers can help clients:
- review their cropping program and chosen risks
- gather the seasonal information required by insurers
- compare available crop insurance structures and terms
- understand the difference between fire-and-hail and broader products
- review crop areas, yields, values and financial interests
- identify additional benefits, sublimits and aggregate limits
- understand declarations and revision deadlines
- manage policy changes during the insured period
- notify and progress a crop insurance claim
The insurer assesses the circumstances and makes the coverage decision. Our role is to understand the cropping operation, arrange cover appropriate to the risks you have chosen to insure, and support you through the season.
What happens after an enquiry?
RMA Insurance Brokers will:
- contact you to understand the cropping operation
- identify the information required
- approach suitable crop insurance markets
- explain available structures, terms, excesses and key differences
- assist with placement and subsequent declarations or changes
Useful information to have available includes:
- current or previous crop schedule
- renewal or expiry date
- cropping plan and paddock details
- hectares, yield and value estimates
- recent crop claims or known damage
- sharefarming details
Frequently asked questions
What does crop insurance cover?
Crop insurance protects the financial value of nominated crops against selected insured events during the insured period. For many Australian broadacre policies, the main insured events are fire and hail.
The crops accepted, insured events, period of insurance, excess, limits and basis of settlement vary between insurers and policies.
The policy wording, schedule and seasonal declarations should always be reviewed to understand the cover arranged.
Does crop insurance cover fire and hail?
Fire and hail are the main insured events under many Australian broadacre crop policies.
Cover may be arranged for fire only, or for fire and hail together, depending on the insurer and the policy selected.
The schedule determines the insured events that apply to your crop. Other causes of crop loss should not be assumed covered unless they are expressly included in the policy. RMA Insurance Brokers can explain what is available for your cropping program.
What additional benefits may be available under crop insurance?
Depending on the policy, additional benefits may include limited cover for chemical or spray drift, straying livestock intrusion, harvested crop in storage or transit, and reasonable claim mitigation or firefighting costs approved by the insurer.
Additional benefits are not identical across insurers. They may have separate triggers, excesses and sublimits, and some policies also apply an overall aggregate limit across all additional benefits.
The benefits that apply should be confirmed from the schedule and wording.
When should crop insurance be arranged or renewed?
Crop insurance should be considered early enough in the season for the farming business, broker and insurer to establish crop details and meet any applicable deadlines.
Some policies are season-specific and end at expiry, requiring a new proposal. Others may continue through an annual crop declaration process. Either structure requires fresh crop, yield and value information each season.
Deadlines for declarations and revisions vary between insurers, increases in cover may not take effect immediately, and harvesting or a claim may restrict later changes to insured yield or value.
How do crop areas, values and excesses affect a claim?
Insured paddocks and crop areas must be identifiable, and sharefarming or other financial interests should be disclosed, because claim-calculation provisions vary materially between policies.
Underinsurance, area definitions and other claim-calculation provisions may reduce a settlement, and policies may apply excesses differently across paddocks, crop areas or claim units.
The applicable calculation must be confirmed from the wording and schedule.
What should I do after crop damage?
Protect people and property first and contact emergency services where required. Once it is safe, contact RMA Insurance Brokers promptly so the insurer can be notified while the crop can still be inspected.
Do not destroy, replant, graze, harvest or otherwise materially alter the affected crop unless it is necessary to prevent further loss, or unless you have received instructions from the insurer or loss adjuster. If harvest must continue, confirm what representative sample areas or standing stubble must be retained before you start.
Follow the directions given by the insurer or the appointed crop loss adjuster, and keep records, photographs and paddock details available. RMA Insurance Brokers can help you notify the claim, identify the information requested and understand the process. The insurer makes the coverage and settlement decision.
For genuine emergency assistance outside business hours only, contact Brendan Kelly on 0411 013 178 or Brad Hubble on 0409 419 487. Any insurer emergency or claims number shown in your policy documents may also be used.
Related insurance
Farm Insurance
Cover considerations for the wider farming operation, including property, sheds, stored produce, machinery, liability and other farm exposures sitting around the cropping program.
Farm Motor & Agricultural Machinery Insurance
Cover considerations for the headers, tractors, sprayers, chaser bins, utilities and trucks used to plant, treat and harvest the crop.
Livestock & Stud Stock Insurance
Cover considerations for commercial livestock and higher-value stud stock on mixed farming businesses that also run a cropping enterprise.
Transit & Cargo Insurance
Insurance considerations for harvested grain, seed and hay moving to storage, receival points, processors and customers beyond any limited transit benefit in a crop policy.
Management Liability Insurance
Insurance considerations for the directors and officers of farming companies, including management-related claims, employment disputes and statutory exposures.
Review your crop insurance
Every cropping season is different. Crop areas, values, yields and the risks you choose to insure can change from year to year.
Whether you are arranging crop insurance for a new season, reviewing an existing policy or updating crop details before a declaration deadline, RMA Insurance Brokers can assist.
The information on this page is general information only and does not take into account your objectives, financial situation or needs. Cover is subject to the terms, conditions, limits and exclusions of the relevant policy. Insurance products and available cover vary between insurers. Please review the relevant policy documentation and obtain advice appropriate to your circumstances before making a decision.