Widespread crop failures not only immediately affect the farming community by impacting their incomes but also drop the demand for goods produced in other sector. Hence crop insurance plays an important role in not only minimizing the risk which farmers face but it also plays an important role in stabilizing the economy. An unfavorable season can result in detrimental effects on the livelihood of the poor farmer.

The Crop Insurance scheme extends all comprehensive coverage against total or partial crop loss resulting due to

• Flood (An overflow or inundation that comes from a river or other body of water and causes or threatens damage.)
• Drought (Perils due to lack of rainfall or insufficient water source for cultivation)
• Excess Water (Perils due to excess water flows)
• Plant Disease (Damages are caused by Plant diseases)
• Pest Damage (Damaged by insects or other small animals)
• Damage by Wild Animal (Damages are caused by wild animals)
• Other Natural Perils (Other natural perils such as loss or damage to field by storm and tempest, earth quake, natural disaster or arson)

The coverage starts on the date of planting till the harvest of the crop. The insurance coverage and the premiums in crop insurance depend on the risk level. Any loss or damage occur as a result of any other perils other than that mentioned above, company will not entertain them. Claims will be decided on field assessment by Claim committee and not to reap the harvest until a representative of company visit the field and inspect it. This insurance contract ends when once the harvest is reaped. The company decides upon the claim settlement only subject to days, period and extent of Damage.

Agriculture needs tools to reduce the losses due to these uncontrollable risks. A poor monsoon (draught or floods) may cause crops to fail in addition it also results in consequential associated problems. As a solution to these risks, weather insurance is being recommended to the farmers. Weather insurance will help in reducing the revenue losses due to the occurrence of the uncontrollable weather risks. The weather insurance products are very specific to the area, the season, crop and peril insured. A compensation for the decreased revenues from cultivation of the specified crop happening due to excess or deficit in rainfall in the specified location is made to the customer. The compensation would be based on the variation between the Weather Index set and the Actual Observed Index recorded in a reference weather station based on which the model has been developed.

Terms used in Weather Insurance Products

• Reference Weather Station : This mentions the meteorological station where the observations for the purpose of claim settlement of the policy would be done.
• Index : Mathematical construct on the basis of which policy is operationalized. Here it is the total rainfall received in millimeters at the reference weather station in the Policy period.
• Policy Duration : Defines the time period for which the policy is active.
• Cover Phase : These are the independent sub periods of the policy for which independent Strike, Exit, Notional and Policy Limit are set. Each cover phase has a different index calculation.
• Strike : The level of Index below or above which the insured starts getting compensated.
• Exit : The level of Index below or above which the insured gets the full sum insured as compensation
• Notional : The amount of compensation that the insured gets per millimetre of deviation of the observed index from the strike in Rs.
• Combined Premium : Premium that insured is required to pay for one unit of coverage across all the three cover phases.
• Policy Limit : Mentions the maximum compensation that the insured would be eligible for across each cover phase and jointly for combined policy of all cover phases
• Data Source : Mentions the identity of the authority that will certify the weather data.

Claim Settlement :

The reference weather station for procuring weather data during the policy period would be specified stations of the Meteorological Department or Automated Weather Station set by SGIC. The certified weather data obtain from Meteorological Department would be regularly collected by the insurer during the policy period. It is clarified that claims would be solely assessed on the basis of agreed weather indices and actual survey of the field would not be carried out. Similarly payouts would also be made based on the weather index linked payout structure alone and not on the basis of actual loss on the fields.

Exclusions :

Rainfall insurance doesn’t cover losses due to:

• Improper package of practices adopted by the farmer
• Faulty seed material, pests and diseases, fire, weeds, locusts or any other peril unless specified in the cover details.
• Other weather conditions
• Nuclear Risk

The Livestock Insurance Scheme has been formulated with the twin objective of providing protection mechanism to the farmers against any eventual loss of their animals due to death, Permanent disability and to demonstrate the benefit of the insurance of livestock to the people and popularize it with the ultimate goal of attaining qualitative improvement in livestock and their products. Sanasa Insurance Company is committed to delivering prompt service, best possible coverage for the lowest possible rates."

This policy provides comprehensive all risks insurance cover for individual animals as well as herds against death and total permanent disability.

• Death of animal due to disease which occur during insured period
• Accidental death of animal due to natural perils such as fire, lightning, flood, cyclone
• Accidental death of animal due to fall down or capsize of animal
• Shoot down by other parties (except owners and employees)
• Death due to predator attack, pray by wild animals
• Death due to snake biting and venom
• Accidental death due to leakage of electricity and be evour in water
• Death during parturition or due to parturition difficulties
• Perils due to vehicle accidents
• Perils due to collapse of building and respiratory embarrassment
• Death due to surgery conducted by certified veterinary surgeon
• Death due to consumption of poisonous feed
• Total permanent disability contracted or occurring during the period of insurance.

Thus the insurance cover protects the borrowers as well as the Bank advancing loans for the purchase of livestock.