Farmers on Vancouver Island and right across Canada are getting an unwelcome surprise from their insurance companies as they face massive, unexpected increases to their premiums.
Neil Turner, a Comox Valley fruit and vegetable grower, says he got quite the surprise when he recently went to renew his farm insurance.
“It was a huge shock, a shock when I didn’t need it,” said Turner. “Farms at this time of year aren’t making any money, it’s when money is going out in preparation for the planting season.”
His broker said the company he’d always dealt with wouldn’t insure him at all and was scrambling to find one that would. The only offers Turner got were double the $3,000 he’d paid before for liability and dwelling insurance.
“It’s a huge difference to add that extra cost which doesn’t really help in the production of food,” he said.
Turner is not the only farmer dealing with a suddenly steep insurance hike.
Allen McWilliam of Tannadice Farms in Courtenay has been raising livestock in the Comox Valley for 45 years and he’d been with the same insurance company the entire time, until now.
Just nine days before his policy was to expire in December he was told that he wouldn’t be covered again.
“Well, I’m quite puzzled by it actually because I didn’t think we were a bad risk,” said McWilliam. “We have only ever had one claim over that time and it was a relatively minor one.”
McWilliam says he finally found a broker in Duncan who got him insurance but it was still $2,000 more than he used to pay. He ended up dropping the fire insurance coverage altogether because it would have been another $2,500 on top of the extra $2,000.
“We gather its part to do with the fact we have pigs so we have some confinement livestock here and they don’t like those sort of buildings or that liability,” he said.
Farm insurance falls under commercial insurance covering liability and dwellings but does not cover crop or livestock losses.
The Insurance Bureau of Canada says the increases to premiums are primarily due to an increase in the “frequency and size of claims,” along with “bad weather, low-interest rates, and the pandemic.”
“Insurance is all about risk and it’s the premiums of the many pay for the losses of the few,” said Rob de Pruis, director of Consumer and Industry Relations at Insurance Bureau of Canada. “What we are seeing is that thousands of businesses across the country have been forced to close just because of the pandemic. When these businesses are closing they’re also canceling their insurance.”
De Pruis says farmers should learn what they can about risk management and do anything they can to reduce their risk. He also says farmers can contact a risk manager at [email protected].
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