Insurance for farmers

Farming is rated as heavy manual work almost everywhere. The reasons are specific: quad bikes and side-by-sides, tractors and PTO shafts, stock handling, chemicals, chainsaws, and doing all of it alone, far from help. Insurers care about the isolation as much as the machinery — the time between an incident and treatment is part of the risk.

But the classification is the least interesting part of a farmer’s insurance. The interesting part is structural. For most New Zealand farming families the farm is simultaneously the business, the house, the superannuation scheme and the inheritance. There is no diversification. If the person who runs it cannot run it, everything is exposed at once — the debt still accrues, the stock still needs feeding, and the bank still wants its interest.

So the useful question is not “how much income do I need replaced?” It is “what does it cost to keep this operation running without me?” Usually that is a farm manager’s salary plus casual labour — a larger number than the drawings the farmer actually takes.

The last structural point is succession. Where one child is on the farm and two are not, life cover is often the only practical way to leave the non-farming children something without forcing a sale or loading the farming child with debt. This is one of the few situations where a large life policy is unambiguously the right tool.

Almost every self-employed farmer pays ACC levies. Far fewer have checked which product they are on, and the difference decides what happens after an accident.

Note the last row. Whichever ACC product you are on, illness is outside the scheme. Cancer, heart disease, stroke and degenerative back and joint problems are exactly the events most likely to take a farmer in their fifties out of the business, and ACC pays nothing for any of them.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Whether you are on ACC CoverPlus or CoverPlus Extra, and whether the CoverPlus Extra amount is still realistic.
• Whether cover is owned personally, by a trust or by the farming company — this changes who receives the money.
• Whether the sum insured reflects farm debt including seasonal finance and stock or plant loans, not just the mortgage.
• Whether trauma cover is sized to replacement labour rather than personal drawings.
• Personal guarantees given to the bank, which do not disappear when you do.
• Whether the policy structure supports the succession plan or quietly cuts across the will.

Every New Zealand insurer writes rural and farm cover to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• Farm structures involve trusts, companies and partnerships, and policy ownership determines who gets the payout and how it is taxed. This is where farming cover most often goes wrong.
• Occupation classification for farmers varies — dairy, sheep and beef, arable and horticulture are not always rated identically.
• Sizing trauma cover to replacement labour rather than drawings is a different calculation, and one most direct sales channels never do.
• An adviser can coordinate cover with the accountant and the succession plan so the insurance and the will are not pulling in opposite directions.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.