Sasria reclassifies agricultural equipment, lowers prices

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Grain SA has welcomed the announcement by the South African Special Risks Insurance Association (Sasria) that it has reviewed the classification of agricultural vehicles from the perspective of insurance cover.

As agricultural equipment rarely leaves farms, industry players have welcomed the review of the insurance classification of such vehicles by the South African Special Risk Insurance Association (Sasria).
Photo: FW Archives

Grain SA has welcomed the announcement by the South African Special Risks Insurance Association (Sasria) that it has reviewed the classification of agricultural vehicles from the perspective of insurance cover.

That was according to Corné Louw, head of applied economics and member services at Grain SA.

According to Grain SA, Sasria previously categorized agricultural vehicles (tractors, harvesters, sprayers, planters and heavy haul trucks) as M8 heavy duty vehicles.

According to Sasria’s initial proposal, this meant that the association’s tariffs on agricultural equipment would have increased significantly.

For example, the annual rate for a vehicle insured for R2 million would have increased by 1,736% from around R326.78 to R6,000.98.

After fruitful discussions with Grain SA and other agricultural stakeholders, Sasria had agreed to classify agricultural tools as special agricultural equipment, with a much lower premium than that under which heavy duty vehicles were insured.

The current Sasria rate for M8 vehicles was 0.016% of the sum insured. The rate for agricultural machinery has been set at 0.006% of the insured amount of the vehicle. For example, the premium for a tractor insured for R2 million would be R1,200.

“Grain SA welcomes Sasria’s continued commitment to the agricultural sector. Since farm equipment rarely leaves the farm, it didn’t make sense to place farm equipment in the M8 category,” Louw said.

“SASRIA has further committed to effectively backdating the rate to February 1, 2022 for new or renewal policies [taken out on or before] this date,” he added.

Dr Jack Armour, Commercial Director of Free State Agriculture, said Sasria’s initial drastic tariff adjustment was totally out of touch with the economic realities of farming. He highlighted the important role played by organized agriculture in bringing the issue to the fore.

“It seems like [Sasria] issued a general increase earlier, disregarding the fact that farm equipment would almost never be exposed to [the same] major risks than trucks.

“The drastic increase also covered tractors, harvesters, self-propelled sprayers, planters, etc. These machines are used mainly on farms, without any exposure to the risks that Sasria responds to,” he said.


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