Weather conditions play a very important role in agricultural activities. From sowing the seeds to harvesting of crops, weather must be in favor of the farmers for a good produce. But this cannot always be the case. Thus, to tackle the losses due to extreme weather conditions, insurance companies have come up with weather insurance.
Table of Contents:
What is Weather Insurance?
Weather insurance is a part of crop insurance which is designed to specifically remedy damages due to adverse weather conditions leading to loss of income of farmers and individuals related to agricultural activities. Although there is a government funded insurance policy by the name of Weather Based Crop Insurance Scheme (WBCIS), one can also opt for weather insurance provided by insurance companies.
What is Covered under Weather Insurance?
Crops covered under weather insurance include:
- Food crops (cereals, millets and pulses)
- Oil seeds (mustard, sunflower, etc.)
- Commercial or Horticulture Crops (cotton, coffee, tea, etc.)
Peris covered under weather insurance include:
- Rainfall: Deficit rainfall, excess rainfall, unseasonal rainfall, dry-spell, etc.
- Relative Humidity: High humidity levels leading to inability of plants to draw nutrients from the soil, thus damaging crops
- Wind: High wind speed or hot wind leading to reduced growth of crops, lodging of crops, etc.
- Temperature: Extreme temperature leading to spoilt crop, wilting of plants, etc.
Who Can Take Weather Insurance?
- Farmers involved in agricultural activities can take a weather insurance policy
- Owners of the farming land
- Farmers working on shared land, also called sharecroppers
- Tenants practicing agricultural activities for livelihood
Documents Required to Purchase Weather Insurance
Although documents requirement may slightly vary with different insurance companies, following details are compulsorily required to purchase a weather insurance policy:
- Photo ID Proof (Ration Card, Aadhar Card, etc.)
- Land Record Document
Exclusions under Weather Insurance
Following conditions fall out of the scope of coverage of weather insurance:
- Damage or loss of crop due to nuclear waste or combustion of fuel
- Damage or loss of crop due to internal feud
- Damage or loss of crop or damage to agricultural land due to anti-social activities (terrorist-attack, riots, etc.)
Companies Offering Weather Insurance
As for now, apart from the government sponsored Weather Based Crop Insurance Scheme or WBCIS, one can opt for weather insurance policies from the following insurance companies:
- ICICI Lombard
- HDFC Ergo
- Bajaj Allianz
Advantages of Weather Insurance
- A back-up income option in times of extreme weather conditions leading to break in farming
- No need to opt for another mode of earning a living as the insurance aims at boosting farmers to continue with agricultural activities by providing better coverage in times of need
- Affordable premium leading to comprehensive sum assured
- There is a substantial government subsidy on premium where farmer premium rates are fixed at 1.5 – 2% of the sum assured on Kharif/ Rabi crops
- Adequately backed up finances lead to enhanced risk taking capacity of farmers
- Credibility of loanee farmers increases
Important Aspects
- It is very important to notify your insurance company about the event within 60 days of its occurrence
- If the insurer fails to produce relevant documents supporting the claim, company shall not be liable to pay for the loss or damage thus occurred
- If a period of 12 month goes by without the insurer informing about the event leading to claim, no claims shall be entertained by the insurance company
- All loanee farmers are already covered in the government sponsored Weather Based Crop Insurance Scheme (WBCIS) on compulsory basis
- Non-loanee farmers can opt for WBCIS or other weather insurance schemes provided by insurance companies
FAQs
Q1. Do I need weather insurance if I already have crop insurance?
It depends on the average weather conditions in your local area. If it is a place where extreme weather is a common phenomenon, enrolling in a weather insurance separately might prove beneficial.
Q2. What is the premium rate for Kharif and Rabi crops in PMFBY?
For Rabi crops, premium rate is fixed at 1.5% of the sum assured while for Kharif crops, it is fixed at 2% of the sum assured.
Q3. What is the period of risk in a weather insurance policy?
Period of risk is the time for which insurance can be claimed. This period ideally starts from sowing of seeds and lasts till the crops are harvested and sold.
Q4. If a farmer does not have any loan, should he still buy a weather insurance scheme?
Non-loanee farmers are not required to go for a crop insurance or weather based crop insurance but it is advised to do so as adversities may hit anytime and wreck money matters heavily.
Q5. How is weather insurance different from crop insurance?
Crop insurance provides coverage against damage of crops due to natural calamities mainly while weather insurance deals in crop loss due to adverse weather conditions like heavy rainfall or extreme humidity levels.