Why unoccupied dwellings on farms create extra risk

The ongoing shortage of farm workers in Australia continues to pose significant challenges for farmers across the country. Their reliance on seasonal workers has long been a cornerstone of agricultural operations, but securing this workforce has become increasingly challenging.

Peter Morsley, Farm Underwriting Manager at ARGIS, says the shortage of seasonal farm workers has implications for farm insurance. The reduced occupancy of farm dwellings, typically utilised to house seasonal workers, not only impacts the profitability and sustainability of farms but also raises concerns from an insurance perspective.

What’s the risk?

“Occupancy is a rating factor when underwriting any dwelling. So, when we're underwriting dwellings on farms, one of the factors we consider is whether it's owner-occupied, rented out or casually or seasonally occupied,” Peter says.

“On a farm, this might include a house to accommodate seasonal workers that work certain times of the year, or a second dwelling on the property that's used by the farmer’s family and friends visiting the farm.”
While various occupancy scenarios are acceptable risks, buildings left unoccupied for extended periods present heightened risks from break-ins, vandalism, fire, and maintenance issues. This increases the risk of trespass or malicious and accidental damage claims.

What the policy covers

ARGIS Farm Extra Insurance provides cover for properties that are unoccupied for up to 120 days before coverage is reduced. However, it's important to understand that "occupancy" entails overnight residence in the building.

Peter stresses the need for clear communication between brokers and clients regarding building occupancy status.

He encourages brokers to notify underwriters if a building is approaching the 120-day limit of unoccupancy, as ARGIS may consider extensions with conditions such as regular inspections and maintenance.

As labour shortages are likely to continue, unoccupied buildings remain a concern in the agricultural sector for the foreseeable future.

The shortage of farm workers in Australia underscores the need for proactive communication between brokers and insurers, with flexibility and collaboration essential to ensure the continued protection of farm dwellings.

Here to help

For more information or a discussion about unoccupied premises on farms, or for general enquiries about ARGIS Farm Extra Insurance, you can contact us on 1300 794 364.

The cover is subject to terms and conditions, limits and exclusions of the policy. Any information provided above is general advice only and has been prepared without taking into account your objectives, financial situation or needs. SGUAS Pty Ltd t/as ARGIS Insurance (ARGIS) acts for the insurer, Pacific International Insurance Pty Limited (Pacific). Consider the Product Disclosure Statement and Target Market Determination, available by contacting ARGIS on 1300 794 364 or visiting www.argis.com.au, before deciding if it is right for you.