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Farming is a lifestyle, a business, and an essential part of our economy. But it’s no secret that farmers face unique challenges that can make their work unpredictable and financially risky. Mother Nature often has her plans, and unexpected equipment breakdowns or accidents can lead to costly setbacks. Insurance provides a safety net, but for many farmers, traditional policies can feel costly and complicated, especially when they’re paying for year-round coverage on machinery that only sees action during specific seasons.

That’s where Pay As You Farm (PAYF) steps in. This insurance model, crafted specifically for farmers, aims to make insurance more cost-effective by basing coverage on how and where you use your equipment. Here’s a closer look at what PAYF offers and how it can improve insurance for you and your farm.

1. What is PAYF?

PAYF is an insurance model developed with farmers in mind. The essence of PAYF is simple: you only pay for the risks you face, not for risks that don’t apply. Instead of charging a flat premium based on assumptions, PAYF considers where your machinery is used and how often. This makes it possible for farmers to keep their equipment comprehensively insured all year without the financial stress of paying high premiums for unused coverage.

Imagine your most valuable equipment, like tractors, harvesters, or sprayers, sitting safely in the shed for months during off-season periods. With PAYF, those low-risk periods are recognized, and you’re rewarded at the end of the policy period with a Shed Rebate if your equipment has spent a significant amount of time in safe zones.

In short, PAYF adjusts to the rhythm of farm life, offering flexibility and savings for real-world usage.

2. The Creation of PAYF: Built on Farmer Feedback

The PAYF product came to life because insurers started listening to what farmers really needed. Kobus Stapelberg, the head of King Price Agri, took the time to understand the financial pressure many farmers face with insurance costs, especially when some equipment sits idle for the biggest part of the year. Farmers wanted coverage that acknowledged how equipment is actually used.

To qualify for the Shed Rebate, for example, it’s essential to prove that the equipment has been in a safe, low-risk location, such as a shed, for a significant period. With PAYF, the policy roughly allows you up to 1,500 hours of use outside of this low-risk area per year, which is more than enough based on most farmers’ actual usage. This means you can carry out your daily operations without worrying about clocking every hour, and still enjoy up to 30% in rebate at renewal.

This 1,500-hour allowance is well above the average usage, ensuring farmers can go about their work without worrying about crossing usage limits and losing out on potential savings.

3. How PAYF Works: A Simple Breakdown

Here’s how PAYF makes insurance simpler and more affordable:

1. Stable Premiums All Year: While traditional insurance policies can come with fluctuating premiums, PAYF offers a stable, predictable premium that doesn’t change month to month. This ensures you always know what you’re paying and can budget effectively.
2. Zones and Usage-Based Rates: PAYF coverage uses “zones” on your farm, with each area rated based on its risk exposure. For example:
   • Shed (Low Risk): Equipment stored here is considered low-risk, resulting in lower insurance costs.
   • Field (Moderate Risk): This zone is rated slightly higher, reflecting the daily demands of farm work.
   • Public Roads (Higher Risk): Moving equipment on public roads, especially at night, carries more risk, and rates are adjusted accordingly.
3. Annual Shed Rebate: At the end of each policy year, if your equipment has met the conditions for low-risk storage (i.e., spending much of its time in low-risk areas), you’ll be eligible for a rebate of up to 30% of your premium.
4. Comprehensive Tracking with AFN Platform: PAYF also offers free access to the AFN platform, a GPS-based tool that lets you track equipment location and usage. You can confirm that workers are following instructions, and even manage contractors’ use of equipment.

4. Benefits of PAYF for Farmers

1. Flexible, Usage-Based Premiums

Farmers only pay for the risks they actually take on. During peak season, your equipment is fully insured no matter where it’s used, while your Shed Rebate will reflect the lower risk as equipment stays in storage or moves less frequently.

2. Cost-Effective

By tracking your equipment's use and location, you can reduce your insurance costs at renewal. The PAYF rebate is designed to reflect your equipment’s safe use, potentially lowering your premium by up to 30%.

3. Free Monitoring Platform

The included AFN platform lets you monitor your machinery’s location in real-time. This is a practical tool for checking whether equipment is in use where it should be, especially helpful for large farms or when equipment is hired out.

4. Peace of Mind for Year-Round Coverage

Unlike traditional limited-cover options, PAYF doesn’t require you to switch coverage off and on, risking gaps in protection. You have comprehensive coverage throughout the year without the need to modify the policy during quieter periods.

5. Making Insurance Work for You: Client Retention and Convenience

One of the most significant benefits of PAYF is its focus on building a long-term, reliable insurance relationship with farmers. PAYF offers a policy that aligns with real farming needs and provides a built-in rebate incentive, encouraging policy renewals and keeping premiums cost-effective over time.

By choosing PAYF, farmers can enjoy a seamless insurance experience that doesn’t require seasonal adjustments or excessive admin. The policy’s rebate and usage-based pricing make it easy to keep coverage active without breaking the bank, which means fewer headaches and greater financial flexibility for you.

6. When Shed Rebate Doesn’t Apply

PAYF is designed to be accessible, but there are a few cases where the rebate doesn’t apply, such as:

• Policy or Section Cancellation: If a policy or section is canceled before renewal, rebate eligibility is lost.
• High Claims Ratio: A high claims ratio may affect eligibility. For instance, if the loss ratio exceeds 60%, the rebate may not be available.

In Summary

With PAYF, insurance is now a practical, affordable, and farmer-friendly product that truly respects your work, your equipment, and your budget. This model provides comprehensive, year-round coverage with the flexibility and savings you need to manage your farm effectively.

With PAYF, insurance adapts to the rhythm of farm life, putting savings in your hands without compromising coverage. Now, you can work with confidence, knowing that both your equipment and your budget are well-protected.