Rainfall Index Insurance
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
- 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
- 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
- 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 Acreage
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
- 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 is 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
- This content is descriptive only. Actual coverage is subject
to the language of the policies as issued.