The risks of fire, frost and hail devastation are present in all areas. A single hailstorm or frost may cause severe financial difficulty, while losses in rapid succession may ruin a farm business. Hail and frost losses are random and unpredictable. While some shires are recognised as being more susceptible than others, it is dangerous to believe that hail and frost losses are isolated to such areas.
Some insurance companies have access to statistical data on crop losses for the majority of shires throughout crop growing areas in Australia. Such analysis allows the insurer to rate individual shires based on their potential risk of loss. This system of zone rating provides an equitable and efficient method of rating, since growers in low risk areas do not subsidise the growers in high risk areas.
It is critical that farmers wishing to purchase crop insurance select a company that makes use of a well-trained and respected pool of assessors. The principle job of the crop assessor is to establish the amount lost due to the impact of frost and of hailstones. A significant number of tests are taken from a large number of sample sites in each paddock.
The percentage loss of yield calculated is effectively the amount of fruit/grain lost due to hail, divided by the amount of fruit/grain present prior to hail.