Frost can be a silent destroyer in the Australian agricultural landscape. For farmers, a cold snap can mean the difference between a profitable year and a financial struggle. Parametric insurance for frost events provides a straightforward solution to this chilly problem.
Frost Parametric Insurance: What Is It?
Parametric insurance for frost is not based on damage assessments but on measurable weather events. When temperatures fall to a level that could harm crops, this insurance kicks in, providing payouts that help farmers manage and recover from the loss.
A Real-World Example of Frost Insurance in Action
The attached graphic represents a payout model for a frost event occurring between 15/08 and 29/08. With a threshold of 0°C and a strike temperature of 0°C, the policy parameters are set to trigger once the temperature dips below freezing.
Coverage Details
Period: 29 days
Threshold and Strike: 0°C
Tic: $20,000
Maximum Payout: $100,000
Premium: $8,500 (8.5% of the payout)
Payout Calculation
Payouts are calculated by summing up every degree below the threshold, then subtracting the strike and multiplying by the Tic. In the example, a Degree Day (DD) of 3.2 resulted in a payable DD of 3.2, leading to a payout of $64,000 to the farmer.
The Importance of Frost Insurance for Australian Farmers
Frost events can devastate crops, but with parametric insurance, farmers have a financial backup plan. The payouts allow for quick recovery, ensuring that operations can continue and investments are protected.
Securing Your Enterprise Against Frost
Parametric insurance is about understanding and managing risk. With CelsiusPro Australia, farmers get coverage that's easy to comprehend and aligns with the real risks posed by frost to their livelihoods.
Frost Protect Weather Certificate
The Frost Protect Weather Certificate from CelsiusPro offers Australian farmers a financial safety net against frost damage during critical crop flowering periods, with instant payments based on temperature thresholds, without the need for claims or damage assessments.
Frost Day Weather Certificate
Secure your crops against sudden frost with the Frost Day Weather Certificate, offering rapid financial support when temperatures drop unexpectedly, ensuring your agricultural operations remain unaffected.
Cumulative Frost Weather Certificate
The Cumulative Frost Weather Certificate offers comprehensive financial protection against the aggregate impact of frost over a season, ensuring your farm's resilience through colder periods.
As temperatures become more unpredictable, having frost parametric insurance is no longer optional for Australian farmers—it's a necessity. Our case study illustrates the effectiveness of such a policy in providing rapid financial assistance during a critical time of need.
Frost doesn't have to mean financial loss. With CelsiusPro's Frost Parametric Insurance options, you can safeguard your crops and your peace of mind. Embrace the frost with confidence, knowing that you have a financial safety net in place. Contact us now to set up your tailored frost coverage and keep your farm thriving through the chill.