05 Apr 2022
Following the 2021 riots, the South African Special Risk Insurance Association (SASRIA) reviewed the premiums of certain sectors, which resulted in a dramatic increase over the past year.
According to Circular 510 of 14 September 2021 on the SASRIA website, agricultural vehicles (tractors, harvesters, sprayers, planters and heavy transport trucks) fell under the M8 Heavy Motor Vehicle category. Tariffs on these vehicles have been proposed to increase by 1736% from R326.78 to R6000.98 for an insured amount of R2 000 000. This original proposal by SASRIA would increase the rate by 0.016% to 0.35% - a further burden on the agricultural sector which is still under pressure.
Grain SA took the lead and, together with other agricultural role players, started negotiations with SASRIA so as not to classify agricultural equipment similar to trucks. After successful discussions, SASRIA agreed to classify agricultural implements as special agricultural equipment with a premium much lower than that under which trucks are insured. The new rate is set at 0.06% effective 1 August 2022.
“Grain SA is delighted with SASRIA's continued commitment to ensure that risks are priced correctly and with the revaluation of the risk rate for vehicles in the agricultural sector. As agricultural equipment very rarely leaves the farm physically, it did not make sense to categorise farm equipment under the M8 category. SASRIA has further committed to effectively backdate the rate to 1 February 2022 on new or renewed policies from that date,” Corné Louw, Grain SA head: Applied Economics and Membership Services said.
To download the full SASRIA Circular 518, click here