Rapeseed Drowned «for the Wrong Reasons»: Farmers Have to Argue with Insurers 0 26

The Bank of Latvia urges insurance companies to more actively explain the terms of insurance contracts to clients at the time of their conclusion, rather than waiting until the claim submission stage.

This year, due to the ongoing rains, about 70 hectares of rapeseed out of 270 planted were lost at the 'Ainava' farm in the Augšdaugava region. Despite the fact that the crop was insured, the insurer refused to pay compensation in full. The reason for the refusal is the terms of the contract, in which prolonged rains are separated from the risk of heavy downpours. In other words, if the crops had perished due to heavy downpours rather than prolonged rains, compensation would have been due.

The owner of the farm expressed confusion: "What difference does it make what kind of rains caused the rapeseed to perish if the result is the same?".

He also noted that 'Ainava' is far from the only farm dissatisfied with the actions of insurance companies. The Bank of Latvia, in the framework of supervision, has already indicated that insurers must provide clients with easily readable and understandable information about the insurance product, including a standardized information document on property insurance. Clients, in turn, are obliged to familiarize themselves with this information to understand the terms of the contract and decide whether it meets their needs.