Named Perils vs. Multi-Peril Crop Insurance: Which Is Right for You?

The Two Main Types of Crop Insurance

New Zealand growers have access to two fundamentally different types of crop insurance, and choosing between them is one of the most important decisions in structuring your risk management programme.

Named Perils Insurance

Named perils insurance covers specific events that are explicitly listed in the policy. Common named perils for NZ crops include:

• Hail
• Frost
• Fire
• Wind / Windstorm
• Flood / Excess Moisture
• Lightning
• Snow/Ice

Advantages: Lower premiums. Clear, easy-to-understand coverage. Widely available from NZ insurers including FMG.

Disadvantages: If your crop fails for a reason not on the list — drought, pest, disease — you're not covered. Can feel inadequate after a "grey area" event.

Multi-Peril Crop Insurance (MPCI)

MPCI provides an all-risks guarantee: you are covered for crop loss from any natural cause, subject to defined exclusions. The policy typically guarantees a minimum yield or revenue (e.g., 70% of your historic average yield).

Advantages: Comprehensive protection. Covers drought, which is excluded from most named perils policies. Provides income certainty for planning.

Disadvantages: Higher premiums. Less widely available in NZ — typically requires access to international markets via specialist brokers. More complex claims process.

How to Choose

Consider MPCI if:

• You grow high-value crops with large input costs
• Drought is a significant risk in your region (Hawke's Bay, Canterbury)
• You have supply contracts with significant penalty clauses
• Your operation is large enough to justify the higher premium

Consider Named Perils if:

• Your main risk is a specific weather event (e.g., hail for orchards)
• Premium cost is a primary consideration
• You want a simple, straightforward policy

Getting the Right Advice

The best approach is to have a frank conversation with a specialist crop insurance broker who can present both options with comparative pricing. Our broker network can access both named perils policies from NZ insurers and MPCI products from specialist international markets.