Agricultural insurance represents, in theory, the main instrument for protection against climate risk. In practice, coverage remains limited. According to Eurostat and the Romanian Financial Supervisory Authority (ASF), in 2024 less than 30% of Romania’s utilized agricultural area was insured against the main climate-related risks.

The cost of insurance policies and the level of compensation explain this situation. Insurance premiums account for between 4% and 7% of the insured value, while compensation payments are conditional on high loss thresholds. In many cases, actual economic losses do not reach the level required to trigger a payout.

Public support mechanisms have partially reduced the initial cost, but they have not solved the problem of effective coverage or payment timelines. Delays in damage assessment and compensation payments negatively affect farms’ cash flow.

For 2026, agricultural insurance should be viewed as a loss-mitigation instrument rather than a guarantee of financial stability. Without investment in irrigation and soil management, climate risk continues to be borne largely by the farmer.

(Photo: Freepik)