Features of agricultural insurance

Agricultural production to a greater extent than any other depends on weather conditions, therefore insurance of this type of activity is especially important for entrepreneurs. Agricultural insurance mitigates the consequences for entrepreneurs after natural disasters that may result in crop or livestock death. 
Given the importance of this area, the Russian government supports the development of agriculture. In the federal law dated December 29, 2006 N 264-ФЗ (as amended on July 29, 2018) “On the Development of Agriculture” there is a separate article 12 “Agricultural insurance carried out with state support”. 
When leasing equipment, as with any other financial transaction, there are a number of features. In the article we will analyze the following points:

What are the objects of insurance of agricultural enterprises

The objects of insurance of agricultural enterprises include the property interests of the insured associated with the risk of loss:

  • Harvest
  • Cattle
  • Property

Subject to Compulsory Insurance

Agricultural insurance is a voluntary type of insurance that is maintained at the state level. For example, according to Federal Law 260 enterprises engaged in farming, state support may be provided for insurance of their activities. At the expense of budget funds they can reimburse up to 50% of the insurance premium. 
It is possible to issue an agricultural insurance contract with state support for agricultural crops and planting of perennial plantings.

Insured event – determining factors

Agricultural production to a large extent depends on random weather factors, which a person is not able to influence. Therefore, most insurance cases are associated with natural anomalies, such as:

  • the impact of adverse natural phenomena (drought, frost, flood, etc.);
  • crop loss as a result of an invasion of pests;
  • violation of the supply of electricity or water to the crop, which is grown on specially equipped land.

Sum insured – what determines the amount of insurance compensation

With agricultural insurance, the insurance amount depends on many factors, therefore, it is always calculated individually. The insurance amount primarily depends on the insurance object: crop, animals, property. Further, the calculation takes into account the book value, type of property, animals are classified by breed, age and conditions of detention, etc. Each section has its own characteristics. On our website you can read more about each type of agricultural insurance. If you have any questions, write or call us, we will help to understand the details. 
The amount of insurance indemnity is indicated at the conclusion of the insurance contract. The amount may be affected by the deductible and additional insurance conditions.

What you need to know with agricultural insurance

When agricultural insurance is necessary:

  1. Analyze your situation.
  2. Determine the degree of risk of loss, taking into account all the details.
  3. Examine the offers of insurance companies and choose the most suitable option.

The specifics of agricultural insurance is such that a large number of accidents that do not depend on the human factor lead to an increase in insurance risk. Tariff rates in this segment of the insurance market are quite high. Therefore, it is important to correctly choose the insurer. Do not forget about state support with which you can compensate for your insurance costs.