With Australian farm incomes facing pressure and insurance premiums rising by up to 40% in some regions, agricultural leaders are urging producers to move away from a “set and forget” mentality. In today’s climate, being strategic with your insurance is no longer just a recommendation—it is a vital business necessity.

As weather patterns become more volatile and the cost of rebuilding skyrockets, a well-structured policy can be the difference between a minor setback and a total loss.

The Risks of Underinsurance in 2026

The most significant threat to Australian farms right now isn’t just the weather; it is underinsurance. Many farmers are still insuring their assets based on values from three or four years ago. However, with global supply chain shifts and rising labor costs, the cost to replace a shed, silo, or specialized piece of machinery has surged.

If your “sum insured” doesn’t reflect current market reality, you could be left with a massive funding gap when you need it most.

How to Be Strategic with Your Coverage

1. Audit Your Asset List

Review every building and machine on your property. Are you still paying to insure an old, unused shed that you wouldn’t bother rebuilding? Conversely, have you added new technology or infrastructure that isn’t yet listed? Categorize your assets into “essential,” “functional,” and “redundant” to ensure your premium is working where it matters.

2. Review Your Excesses

A strategic way to lower your premium is to increase your excess. If you have the cash reserves to handle a $5,000 or $10,000 loss yourself, increasing your excess can significantly reduce your annual costs. This shifts your insurance focus to protecting against “catastrophic” losses rather than “nuisance” claims.

3. Consolidate into a Farm Pack

Many farmers still hold separate policies for their vehicles, home, and business liability. Consolidating these into a single “Farm Pack” is often more cost-effective and eliminates “gaps” in coverage that occur when different insurers argue over who is responsible for a claim.

4. Document Your Risk Mitigation

Insurers are increasingly looking for reasons to reward proactive farmers. If you have clear firebreaks, modern chemical storage, or a robust biosecurity plan, make sure your broker knows. Demonstrating that you are a “low-risk” operator can help your broker negotiate better terms on your behalf.

Moving Beyond Traditional Cover

Strategic farmers are also looking at modern alternatives like Yield Shortfall Insurance and Parametric (Index-based) Insurance. These tools allow you to protect your income against specific weather events—like frost or drought—without the need for long, complicated loss adjustment processes.

By treating insurance as a dynamic part of your business plan rather than just a fixed bill, you can secure your farm’s future in an increasingly unpredictable world.

Expert Advice for Your Agribusiness

Navigating the complexities of the current insurance market requires more than just a quote—it requires a strategy. You need a partner who understands the local landscape and the specific risks facing your region.

For expert insurance advice and a comprehensive review of your farm’s risk management strategy, contact ARMA Insurance Brokers. Their specialists will work with you to strip out unnecessary costs and build a robust protection plan that matches your farm’s goals.

Contact ARMA Insurance Brokers today to ensure your insurance strategy is as resilient as your farm.