Buying hail insurance can be described as an art form. Some also call it a balancing act and others say it’s a science.
Whatever it’s called, the challenge is the same. Producers carefully conduct an accurate analysis of each field, figure out its economic potential and then determine what level of hail insurance is most appropriate. This assessment may change as the growing season progresses.
If a farmer’s hail insurance agent is just down the road, he can simply drive over with his bundle of notes, work through some of the possible scenarios together and be back home in an hour with hail insurance policies in hand.
Read Also
VIDEO: Green Lightning and Nytro Ag win sustainability innovation award
Nytro Ag Corp and Green Lightning recieved an innovation award at Ag in Motion 2025 for the Green Lightning Nitrogen Machine, which converts atmospheric nitrogen into a plant-usable form.
This was no problem when the local elevator was only eight or 10 kilometres away and the elevator agent doubled as a hail insurance agent.
However, today the drive for many farmers to the nearest agent is an hour or more each direction. As well, the agent isn’t always available when the farmer is ready to do business.
That’s the situation three farmers from Wilkie, Sask., were pondering five years ago when they came up with the idea for Ehail Online Canada.
“A couple of us from around here just got together and we thought there had to be a far easier way to figure out a quote for hail insurance,” said Greg Gutting, one of the founding partners.
Gutting, along with neighbors Amos Skinner and Don Karstens, identified five basic hail insurance problems that they figured could be solved by making hail insurance available on the internet.
The most prevalent problem in many farming areas is the lack of access to agents within a reasonable driving distance.
“Since we opened in 2002, a lot of people have called to tell us they were finally through with driving 50 miles (80 kilometres) or more to talk to a hail insurance agent,” Gutting said.
Although Ehail Online Canada sells to all three prairie provinces, most of its business has been with producers in Alberta and Saskatchewan.
“There are some pretty big agents serving Manitoba farmers,” Gutting said.
“They’ll drive around the country side for two months, selling to all their regular customers. But that’s not the situation in Alberta or here in Saskatchewan. We have a lot of areas out here where a farmer has to drive an hour or more one way to see the nearest agent.”
The nearest agent may not always be the one that a farmer would prefer to do business with or he may not handle the companies from which the farmer wants to buy.
Gutting said any producer with an on-line computer connection can visit www.ehail.ca to find different rate and coverage options.
Another problem identified by the trio also relates to the time factor. Gutting said
although rain is generally easy to predict, hail is a different story. Nonetheless, some producers delay their insurance decisions until the evening before they anticipate a major hailstorm. If they can’t contact an agent that evening, they can’t buy insurance when they want it.
“Here’s a typical situation,” Gutting said. “It’s Sunday late afternoon or evening and you’ve decided you want to buy hail insurance. But your agent is at the lake. You’re stuck phoning all around and may end up not buying because you can’t find him.
“Well, the three of us maybe like to go to the lake, too. But with an on-line insurance agency, you can buy your policy whether we’re at the lake or home at the farm. The timing of the purchase is totally up to the producer. As long as the computers function, you can buy hail insurance 24 hours a day. So if you think you can predict hail, this an immediate way to buy the insurance without having to track down an agent.”
Another problem faced by prairie farmers is that many agents carry only one or two insurance companies, which means a producer might pay higher rates or may not be able to deal with the company of preference.
Ehail Online Canada represents seven major hail insurance companies: Butler Byers; Canadian; Farmers; Lombard Canada; Wray’s; McQueens and Rain & Hail. Lombard and Canadian are owned by the same company, but compete in the marketplace in much the same way Saturn competes with Chevrolet.
“Seven companies is more than your average hail agent offers,” Gutting said. “You can look up the rates of all seven companies in a matter of seconds. This means you not only compare rates, but you can also compare the various deductible options and you can instantly see the true rate for any combination of options. The farmer no longer wastes hours of time trying to calculate the true cost.”
Gutting said Ehail Online Canada supports all common deductible options offered by the companies:
- Full coverage.
- Ten percent deductible disappearing at 30 percent.
- Twenty percent deductible disappearing at 60 percent.
- Ten percent with increasing payment factor.
- Excess over five percent disappearing at 25 percent.
- Excess over 10 percent disappearing at 50 percent.
- Twenty-five percent straight deductible.
The Ehail founders also determined that most local agents still use paper forms, which means all data is hand written for each land location.
“Farmers today have to make informed choices about every input, including insurance options. To use the conventional method of figuring out the deductibles and level of coverage you feel comfortable with for, say, 10 quarters, takes too much time. That makes it difficult to make an informed choice. Plus, it’s quite common for a producer to buy from different companies for different quarters. For a mid-sized farm, the agent can spend an hour or more just filling in these blanks on the forms. That’s a waste of everyone’s time,” Gutting said.
“We did away with wasted time. We have a ‘Save Down’ feature in our software so that once you enter your land location information the first time, you never have to do it again.”
He said a producer can come back to that information later the same year or years down the road. If changes are made to the land base, those changes only need to be entered once.
Another problem identified by Gutting, Skinner and Karstens is the time delay when a farmer looks at various deductibles and then calculates the rate differential. Not all companies have the same crop factors or deductible factors, so farmers can often face a wide variety of alternatives.
“Many people are surprised by the difference between companies,” Gutting said.
“At Ehail, the confusion is eliminated because the producer can see the real rates at all times for all companies. The Ehail software is set up to calculate the deductible effect and show the new rate for each company. You get your answers instantly with a couple clicks of the button.”
Gutting said Ehail hired software experts to develop the program. All available hail data for the prairie provinces and all seven hail insurance companies was incorporated into the software.
“We wanted to make sure we had all three provinces covered before we started. We’ve got the software to where we want it now, but it’s always a work in progress. We’re continually upgrading.
“It’s been an on-line type of program right from the start. It’s a little harder to put it together that way, but we decided right off the bat that it had to be accessible to anyone with on-line access.”
Since the company opened in 2002, about 20 percent of its business has been from local farmers in the Wilkie area.
“Our main clientele so far is the farmer who is not well represented by a local agent. If you’ve got a neighbour or a friend who’s an agent, and you’re already getting good service and access to the wide range of premium rates for different companies, then you’re not likely to look at Ehail.
“But if you’re not getting convenient and quick access to five or six companies, or you’re not getting competitive rates, then Ehail might be your answer. That’s who we aim to serve.
“We also get a few new clients who have come to the point where they simply like doing business on-line. They appreciate the speed and convenience.”
Gutting said that if a producer is familiar with computers it is possible to insure all the quarters on a 2,000 acre farm in about 15 minutes.
“If you want to explore all the options thoroughly, then it’s going to take longer, of course. But you can do all that background work in the winter, so when summer comes, you can write up your policies in 15 minutes.”
He said most pay by credit card.
“The instant he hits the pay button, we get his e-mail. Some guys pay by cheque. If a guy tells us he’s firing off a cheque in the mail next day, we believe him and put the policies through. We think there’s still a bit of honesty left in this world.”
