Table grape growers like Domenic Sergi fear hail cover premium rises of up to 165 percent could force growers out of the insurance market and, if there is a repeat of last November’s storms, out of the industry if they cannot afford to insure. Photo: PAUL MENSCH
By VINNIE RODI
THE Victorian and Commonwealth governments have turned a blind eye to the impact of rising insurance premiums on Sunraysia’s horticulturists following last November’s devastating hail storm, according to Sunraysia table grape growers.
Sam and Domenic Sergi own approximately 200 acres of table grapes in Red Cliffs, with the majority of their 2016/17 crop, approximately 140 acres, lost to November’s freak storm.
Their insurance premiums for the upcoming season have risen an incredible 164.5 percent after receiving an insurance payout last year.
“I’ve taken out hail insurance every year for the past 30 years, and I’ve never seen a (price) rise like this – no one who I have spoken with who has been wiped out by hail before has,” Mr Sergi said.
“Hail insurance last year cost us $25,000, this year it’s going to cost $75,000. We all need to pay insurance this year, because at the end of the day if another natural disaster similar to last November’s storms happens, and we’re not insured, we may as well pack up and leave.”
Cardross table grape grower Sam Romeo, whose 2016/17 crop was similarly wiped out thanks to the storm and who also received an insurance payout, is also facing an increase of 150 percent to insure his property this season.
Mr Romeo said he would love to see the State or Federal government introduce a rebate system to help growers cope with the rise in insurance premiums.
Mr Sergi said that other horticulturists he had spoken to across the district, including those based in storm-affected areas like Paringi in New South Wales, Irymple and Merbein, had encountered similar increases.
He said that growers who had only been partly impacted by the Remembrance Day storm, or not impacted at all, had been advised their hail insurance premiums would increase between 20 and 40 percent.
Mr Sergi’s son, Domenic, added that the potential impact of rising insurance premiums on Sunraysia growers was made clear to both Federal Agriculture Minister Barnaby Joyce and his State counterpart Jaala Pulford following last year’s storm, with both Ministers visiting the region at the time to assess the damage.
“Minister Pulford met with myself and other impacted growers, and one concern raised was the risk of growers being completely pushed out of the hail insurance market due to a massive hike in premiums,” Domenic said.
“We flagged this in November last year, and unfortunately those concerns have proven to be well-founded. In my opinion, this is completely absurd and predatory pricing.”
The Sergi’s properties have been insured against hail for the past three decades, with last November marking the first time the pair have made a major claim.
“Which we had to do to survive,” Mr Sergi said. “Prior to that storm hitting, I had already laid out a substantial amount in expenses.
“After the storm hit, I still had to pay my water bill, Council rates, power, not to mention find a way to put food on the table.
“Now, after spending even more money to ensure my properties recover enough to hopefully produce a good crop this year, we’re hit with this.”
Domenic said that while the family business had made “a large insurance claim last year,” he didn’t believe the steep spike in insurance premium costs reflected that his family had been policyholders for 30 years.
“In that time we have only made minor claims on perhaps two occasions,” he said. “Despite the fact that a storm did occur last year, the risk of another similar storm happening again cannot have increased by such an enormous amount so quickly.”
Domenic said that other factors working against local horticulturists was the fact that hail insurance was considered “a specialist market”, with growers only having one or two options to choose from.
“It just doesn’t make sense to me, especially when you consider that our insurance premium for our house and vehicles increased by a far more reasonable 25 percent,” he said. “This is despite the fact that we made a very large claim last year on this policy for all the iron roofing damage caused by hail.”
Domenic plans to write to Minister Pulford in the coming days, urging her to do more to protect impacted growers and the wider horticulture industry following natural disasters.
“If these sort of price increases are being applied to all impacted growers in the district, I believe that the issue is of great enough significance to warrant the Minister’s attention,” he said.
“If there was a forum where our concerns could be raised, I think it would go a long way towards helping growers place pressure on insurance companies, and allow at least the majority of growers to remain insured.”
More than $467million was paid out by insurance companies across North West Victoria, eastern South Australia and western New South Wales following last November’s hail storm.
Government-funded storm assistance grants of $25,000 were also made available to impacted growers, however there was a requirement that those funds be used for recovery and restoration.
“Maybe the government would have better giving that money to the insurance companies to offset these price rises,” Mr Sergi said.
An Insurance Council Australia spokesperson said that insurers price the risk of an event occurring to each property, not to a district, which explained why the level of price rises seen across Sunraysia in the wake of last year’s storm was so inconsistent.
The spokesperson said that any risk assessment then forms the base premium for a policyholder, starting that a decision to change premiums is a commercial matter for each insurer.
For those not aware, a premium is the amount a person pays an insurer for insurance cover. It reflects what the insurer believes is the likelihood a claim will be made, and also includes an insurer’s business costs, and may also reflect the benefits of any discounts or bonuses the insurer may offer.