A sugarcane farmer who lost his crop to a bushfire in November 2018 has lost his offer to increase his payment after a contesting ruling determined his insurer’s settlement offer was fair.
IAG-appointed inspectors estimated the area affected by the bushfires at around 50 hectares and measured 60 tonnes of sugar cane per hectare, for a total of 3,000 tonnes.
The insurer determined its price calculations based on Queensland Sugar Limited’s (QSL) harvest pool price and offered a cash settlement of $91,800.
The plaintiff disagreed with IAG’s offer, claiming that 4,000 tonnes of sugar cane had been lost and payment should be based on a higher price per tonne.
The Australian Financial Complaints Authority (AFCA) panel concluded that IAG’s actions complied with the terms of the fire-only policy, which required the insurer to cover costs either to a limit of indemnity set at $35 per tonne of cane, or 90% of the “cane valuation basis”, whichever is lower.
The policy defined the “sugarcane valuation basis” as the price of sugarcane under the relevant sugarcane payment provisions. IAG said the QSL harvest pool price was the industry standard and at the time of the bushfire was $34 per ton.
The insurer calculated that 90% of the presumed value of the sugarcane was $30.60 per ton, which was below the policy’s indemnity limit. The plaintiff submits that the insurer bases its settlement on the compensation limit of $35 per tonne.
The claimant said that for ten years he had been fallowing about eight or nine hectares and calculated that the correct measurements were closer to 75 tonnes per hectare rather than the insurer’s 60 tonnes per hectare.
The farmer said he planted canes in the fallow area, which were available for harvest in 2018, and argued that based on this unaccounted area, 1000 tonnes should be added to the estimate of the insurer.
The man said that due to factors beyond his control, he was unable to harvest this crop and the unharvested cane would become a leftover crop that would be grown for another two years before being destroyed. in the fire.
The committee was not convinced by the plaintiff’s arguments, claiming that the insurer’s calculations were correct and that the policy did not cover crops that were not to be harvested in the next season.
The AFCA also questioned the claimant’s claims that he had stockpiled extra cane, saying there had been “no substantial evidence to support” the claim.
The determination ruled that the insurer’s offer of $91,800 was a fair amount based on the evidence presented.
Click here for the full decision.