What Is Multi-Peril Insurance and What Are Its Barriers
Farming is one of the occupations carried out in the most uncertain conditions. Since, the main driver is climate, the nature; the risks arising out of its volatile nature encourage the farmers to get them covered with the crop insurance. One of the most important crop insurances available around is multi-peril insurance. Let’s find out what it is and what its benefits are.
Multi-peril insurance – what it is
Multi-peril insurance for crops also known as (MPCI) is a kind of coverage that allows farmers to indemnify them against losses caused by a variety of perils with a single policy, and therefore, a single premium. The premium can be monthly, quarterly or yearly as per the arrangement proposed by the insurance company. Some important facts related to multi-peril insurance are:
- MCPI was introduced for the first time in 1974 and then again in 1999, but could not continue for more than a year. But, now with changes in the plan, the policy is back in popularity.
- It covers a number of perils such as drought, landslide, cyclones, wildlife attack, hailstorm, frost and others.
- Mostly, it proves its worth for winter crops which are to be harvested in winter and get exposed to tough weather conditions prevalent in this season. Main types of crops covered in this insurance are industrial crops, horticulture ground crops, orchard crops, broadacre crops such as grains, legumes, cereals, etc.
This insurance could not get perfect nod from the companies because it comes with lots of barriers. For example, there was no set process to decide whether the damage is caused by natural causes or are manmade. There was no way to check the immoral activities of the farmers like moving to riskier crops for claiming insurance. So, the new draft of this policy comes with high premium and certain strict conditions so that both the companies and the farmers are not at the losing end.