In India, farming communities suffer high losses year after year due to weather
vagaries. Lack of irrigation facilities and non-availability of modern farming techniques,
further compound this problem. This impairs access to rural credit as well. Farmers
find they are unable and to some extent unwilling to pay interest on their crop
loans in a drought year and seek to reschedule principal repayments. Weather risk
also affects the input providers by increasing the volatility in their business
volumes and consequently affecting the profits of the business.
HDFC ERGO offers a comprehensive Rainfall Index Insurance Policy which is a mechanism
for providing effective risk management aid to those individuals and institutions
likely to be impacted by adverse rainfall incidence at an affordable cost.
This Policy is available to farming communities having farm incomes from cultivable
area and who may get adversely affected on account of a Rainfall Deficit. They should
be Members (in groups) of Micro Finance Institutions, Non Government Organisations,
Government Sponsored Organisations and such affinity groups / institutions in rural
and social sector.
- Diminished agricultural output/yield:Covers the diminished agricultural output/yield
resulting from a shortfall in the anticipated normal rainfall within a specific
geographical location and specified time period.
The most important benefits of Rainfall Index Insurance are:
- Rainfall Insurance can transfer rainfall related risks faced by Indian farming community
for food grain and plantation crops, to the global weather markets on competitive
terms. It may be noted that access to international weather re-insurers with geographically
diversified portfolio, facilitates cost reduction.
- Rainfall insurance can facilitate immediate and transparent claim settlement to
the insured farming communities.
- Due to its low administrative costs, Rainfall insurance is cost effective for the
insurer as well, translating into lower premium levels compared to that of traditional
crop insurance
Please note that all benefits are subject to a maximum amount as stated in the policy.
These will be clearly noted in any quotation released or any policy issued.
Premium chargeable depends on various factors such as the type of crop, location,
historical rainfall data, cost of cultivation in the specified area and the acrage
under cultivation.
HDFC ERGO shall not be liable to make any payment under the policy:
- To reimburse any expenses or indemnify any loss, howsoever caused, other than on
account of a Rainfall Deficit even if such loss results in diminished agricultural
output/yield of the Specified Crop cultivated on the Specified Area.
- In the event the Actual Total Rainfall Index is greater than the Normal Rainfall
Index.
- In relation to a Farmer in the event of Rainfall Deficit if the Specified Area identified
with the said Farmer is irrigated or has access to water from natural or man made
sources including rivers, ponds, wells, watercourses, lakes, tanks, canals, etc.
This an illustrative list of Exclusions. For detailed list kindly refer the policy
wordings.
Claims shall be assessed and paid on the basis of the documents submitted to the
Company. In the event that, in the specific geographical location and during the
time period specified in the Schedule to this policy, the Actual Total Rainfall
Index is less than the Normal Rainfall Index, the benefit payable to the insured
shall be the Standard Loss Rate multiplied by difference in Normal Rainfall Index
and Actual Total Rainfall Index, subject to a maximum of the Total Sum Insured.
This content is descriptive only. Actual coverage is subject to the language of
the policies as issued.