In Hungary today’s practice is of two ways how to draw up crops insurance contracts. One is a traditional crops insurance, where the Contractor is given more freedom in determining the content of the contract (including determining yields per hectare or marking the areas to be insured). The other isthe premium-subsidized crops insurance scheme which was launched several years ago. The main difference is that part of the annual premium is reimbursed for the policyholder from a governmental fund in the form of post-financed granted limited amount in case of fulfillment of the certain conditions (for example, the indication of premium-subsidized insurance on the Single Application, the accurate communication of the data and the payment of the premium by the deadline).
If you choose the latter, you can contract in two ways:
– Category A: this variant means the purchase of a package, the content of which cannot be selected, all elements of which must be included in a contract (these are the following risks: ice, fire, storm, winter frost, spring frost, agricultural flood damage, drought, thunderstorms) ). Although not all of listed risks are likely to be considered as relevant ones, the selection of this package is highly recommended due to its level of premium support, which will most likely provide the highest reimbursement (approximately 65%). Support for contracts of type C and then type B will be reduced first in case of numerious requests for reimbursement exceeding the limits.
– Category B-C: unlike the above, while choosing these categories we can select the available risks per crop (for example, we can protect autumn cereals against ice and fire, but also winter rapeseed against ice, fire and storm risks, we also have the option to combine the BC modes with category A within one contract – i.e., following the example above by choosing package insurance for our sunflower areas).
In the case of premium-subsidized insurance, it is important to know that the entire production area of our particular crop to be insured must be included in the contract and also that not the total amount of insurance premium is covered by state aid. According to the rules claims below 30% are not covered by premium-subsidized insurance independently of the risk thus such claims should be covered by a supplementary insurance marked D, which is usually calculated by insurers as a small proportion of the total premium. that their partners can benefit from the fund for as much of the total fee as possible (for example, if a fee for ice and fire damage without discounts is 1-1.2%, then within this D is in most cases only 0.05%).
Currently, four insurance companies offer crops insurance not counting the insurance associations and communities that appear in some places in the region. Our company, in addition to the above, observed that there are four essential aspects to be compared beyond the insurance premium in order to be able to make a thourough decision on the base of offers’ knowledge available on the market, namely
– Definition of insured events (ie how some insurance companies define, for example, fire damage or storm damage);
– Definition of the insurance period (ie for which crop at which growth stage or calendar date the insurance takes effect and for how long);
– Exclusions of insurers (ie in which cases the company does not reimburse);
– Deductibles applied in case of compensation for each type of hazard (here it is very important what percentage of deduction or threshold is applied by an insurer, it is also not less important what the base of calculation of deductibles – the damaged area alone, the insured amount of the damaged parcel or the insured amount of the whole crop in question).
In order to share all this knowledge supporting a prudent decision we provide our customers with a detailed analytical material that allows them to review systematically this information!