The ‘Compensation for Damages in Cases of Disasters Act’ (Wet tegemoetkoming schade bij rampen), for cases of natural disasters, is not applicable to the hail storms and rain showers experienced last week in the south of the Netherlands. Farmers and plantation owners suffered severe damage to their crops and greenhouses; insurers have estimated the total damage at 500 million euros. Although municipalities, health organisations and agricultural organisations requested that a disaster be declared in the affected area, a parliamentary majority did not agree.

Conditions of application

The aforementioned Act is only applicable in cases of natural disaster, i.e. if there is a flood, earthquake or another disaster of a comparable order (Art. 4 of the Act). The recent hail storms and rain showers could be seen as a disaster of at least a comparable order. In 1998 the Act was applied twice after heavy rain showers. However another condition, stated in Art. 4 of the Act., is that the damages may not be reasonably insurable. Ever since 2010 insurance does cover the consequences of extreme weather for farmers. Green house plantations are covered under ‘covered cultivation’ insurance. Banks oblige green house plantation owners to take out such coverage from insurers.

Complaints about farmers insurance

Although insurance premiums are subsidised by the government, farmers complain that premiums remain high and consequently a large number of farmers are actually uninsured. If farmers are insured their own risk is still high. A maximum of 25% of the damage is covered by the insurance. Extra insurance is possible, but not for a reasonable price. Insurances for farmers are currently being evaluated – the recent extreme weather disasters make for good case study material. The question that should really be asked is whether damage caused by extreme weather is ‘reasonably insurable’ in the sense of the Act. This is especially important given that extreme weather is more likely to occur due to climate change.

Other measures available

Although the ‘Compensation for Damages in Cases of Disasters Act’ is not applicable, other smaller measures are being taken. The government wants to examine a pledge to ensure that banks make quicker decisions on loans to farmers and plantation owners. Also an arrangement for government payment for reduced working hours has been made, which should prevent major job losses taking place.