The Cost of Rural Insurance
The costs of rural insurance have increased significantly in the recent past as the number of natural disasters continues to climb. Insurance brokers are reporting premiums that have increased between 20 to 40% in recent times, depending on the insurer. According to Ben Burrell, a Narromine-based spray contractor in New South Wales, the cost of renewing his annual policy for his equipment and liability insurance in recent times was over $55,000 annually. Despite taking good care of his equipment, Burrell noted that accidents could happen at any time and he required adequate coverage to protect his business.
Challenges for Contractors and Farmers
Many farmers and contractors are struggling to keep their businesses afloat due to the high cost of insurance premiums. Inclusive of the cost of coverage needed for expensive machinery, the affordability of insurance is a question and challenge that farmers have to manage. David Jochinke, the National Farmers' Federation's vice president, draws attention to the inflationary pressures on machinery that pushed up the amount of insurance coverage needed by farmers. Jochinke further notes that machinery costs have increased significantly over the COVID period, and waiting time for such machinery has also increased drastically. For contractors like Burrell, the rising insurance costs limit him in managing his business as he has to increase his contracting rates to compensate for the high insurance premiums. In doing so, he's passing the issue onto the farmer, which is not really fair.
How to Reduce Your Insurance Bill
For farmers and contractors who need to lower their insurance costs, properly maintaining their properties could be the solution. Rodney Cox, a Dubbo-based insurance broker with 33 years of industry experience, notes that maintaining their properties would allow farmers to access a wider range of insurance underwriters. He further points out that the Australian market had just six underwriters left, and they want good risks. He concludes that if farmers could do maintenance work themselves, such as painting or screwing down lifted iron, then they would have a wider selection when they visit the market.
The rising cost of rural insurance premiums has caused concerns for farmers and contractors in recent times. Many are already struggling to keep their businesses afloat amid various challenges induced by the pandemic and having to deal with rising insurance costs limits their ability to manage their businesses effectively. Overall, it will require collective efforts from the industry stakeholders to address the challenges and find solutions that ensure affordable insurance for businesses in rural areas.
