Drought is the new normal, not the exception
Why not to rely on compensation
Insurance is the only tool where you know the rules in advance and have them written in the contract.
Index-based drought insurance - how does it work?
On the Slovak market drought is insured mainly in the form of index-based insurance. Its principle is simple: the payout does not depend on an inspection of every field, but on objectively measured data, for example meteorological data and satellite measurements. If the index exceeds the agreed threshold during the monitored period, an entitlement to a payout arises.
Advantages of this approach:
- Objectivity. Data decide on the payout, not a dispute about how much yield there would have been in the field without drought.
- Speed. A lengthy on-site claims assessment is eliminated.
- Predictability. You know the parameters when signing the contract.
The exact scope of cover, the monitored period, the threshold values and the amount of the payout always depend on the specific contract. That is why it is important to set them so that they correspond to your crops and location.
What to watch out for when choosing insurance
Drought insurance is not a product worth buying blindly. When comparing offers, watch in particular for:
- How drought is defined and from what data the index is calculated.
- The monitored period and whether it corresponds to the critical phases of your crops.
- Threshold values and deductible, i.e. from what level of drought an entitlement arises.
- Deadlines for concluding. Drought insurance is arranged in advance, not during the season, when it is already clear that it has not rained.
- Premium support from the state. In recent years the state has refunded part of the insurance costs, but the conditions and deadlines of the calls change and need to be monitored.
The supply of drought insurance on the Slovak market is limited, so the correct setup of the contract matters all the more. At Agropoistenie.sk we work exclusively with agriculture. As part of the RENOMIA group we can compare the available options, set the parameters according to your crop structure and region, and alert you to deadlines and to the possibilities of premium support. And when a loss occurs, we stand by you in negotiating the payout.
Don't wait for the next dry summer. Get in touch and together we will prepare insurance that will work for you even before sowing.
