Why Tractor Insurance is a Ray of Hope for Farmers?

Agriculture is the primary occupation in India. About 60% of the country’s population works in the agriculture sector and contributes nearly 18% to the GDP of India. That is why it is important to address the needs and challenges faced by our agriculture sector, especially while buying a tractor and insuring it with the right tractor insurance policy.

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Tractor Insurance & Its Benefits

Tractor Insurance for Farmers

Tractors are considered the most important asset which helps in doing several farming activities/applications, including sowing, spraying, threshing, cultivation, and rotavation. Given its adjustable rear track and compact design, tractors are ideal for use in orchards and between two crop rows. The machine is also beneficial for farmers in carrying out haulage operations. A single tractor can reduce labour costs substantially and ensure ease of operations, especially for farmers with small lands and those involved in intercultural applications.

A tractor costs more than a few lakhs, which is too much to afford for an average farm household who holds less than a hectare of farmland. The only way for them to manage buying a tractor under such circumstances is by taking a loan, which makes tractor insurance the need of the hour.

A tractor costs more than a few lakhs, which is way too much to afford for an average farming household that holds roughly a hectare of farmland. The only way for them to get a tractor under such circumstances is by taking a loan, this is why it becomes important to get commercial vehicle insurance for the tractor.

Tractor insurance is a type of commercial vehicle insurance policy that covers all unforeseen risks. It ensures financial assistance to the farmer if the insured tractor gets damaged due to unpredicted natural calamities, accidents, or manmade disasters. It also takes care of third-party liabilities of the farmer resulting from causing accidental damages or injuries to third party.

Moreover, a right tractor insurance policy ensures that the farmer is compensated if the tractor is stolen. It even covers the damages sustained by the tractor while in transit through inland waterways, road or rail.

Besides, the farmer can also cover any electrical and non-electrical accessories fitted to the tractor by obtaining the add-on covers. Some of the best commercial vehicle insurance companies have also extended the coverage to other farming implements, such as reapers, chaff cutters, threshers, harvesters, lawnmowers, etc. For further information, visit the official website of Policybazaar Insurance Brokers Private Limited and find a suitable plan as per your need and budget.

Without commercial vehicle insurance, it will be difficult for farmers to cope with situations that cause sudden financial distress. Besides, the constant stress of paying the tractor loan also adds to the misery for the farmers.

Lack of Tractor Insurance Penetration in the Indian Agricultural Sector

As per the survey conducted by the Indian Council of Agricultural Research, almost one-third of the total farm accidents are caused by farm machines. Yet, the penetration of tractor insurance is pretty low in India.

Despite tractor insurance offering so many benefits to the farmers, the data have shown the unawareness of the significance of tractor insurance. Only 30% of the farmers owned a tractor insurance policy in 2015, which is extremely low as compared to the global benchmark of 85%. Also, as per the data of 2015, the majority of the tractor sales are only from 11 states in the country.

Reason for Low Tractor Insurance Penetration Rate in the Indian Agricultural Sector

In India, getting at least third-party liability cover is mandatory for all tractor owners. However, the rate of the insured tractor is quite low in India.

The primary reason for low tractor insurance penetration could be the unpredictable outcome of farming activities. The fate of farmers largely depends on the weather conditions. Poor or late monsoons can adversely impact crop productivity and lead to losses for the farmers. With losses and little income, the sale of tractors takes a hit and in turn, leads to fewer people buying goods carrying vehicle insurance for their tractors.

The secondary reason for low tractor insurance penetration is the lack of awareness regarding the benefits of tractor insurance amongst the farmers. Most farmers are unaware of how tractor insurance can help them to assist during an unforeseen financial burden due to accidental and weather-related calamities. Farmers are also unaware of the benefits of the No Claim Bonus and how it can help to reduce the tractor insurance renewal premiums.

Government Initiative to Increase Tractor Insurance Penetration

Over the years, the government has started several initiatives to increase insurance penetration in the agriculture sector. The Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched to help farmers save on their tractor insurance premiums.

Moreover, several commercial vehicle insurance companies offer tractor insurance policies at affordable premiums for farmers can avail the benefits without any hassles.

However, there is still a need to be aware of the benefits of tractor insurance. Moreover, the distribution and assistance for the various government schemes should be done at the ground level by increasing the number of customer support centres.

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In a Nutshell

Farmers are the backbone of our country and tractors are one of the most significant assets to them. The risks faced by the farmers not only impact them but somehow the entire country. Hence, all farmers must be covered under the various government schemes and buy commercial vehicle insurance for their tractors. Only goods carrying vehicle insurance policy can help them to fight against the unforeseen risks posed by the usage of tractors.

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