Crop Insurance 101: How to Get the Best Insurance Coverage

Farmers battle with natural disasters and other elements just to bring their crops to harvest. To protect them, their hard work, and their financial investment, it’s crucial that they have insurance coverage.

If you are a farm owner or manager, here are some things you must know to help you get the best insurance coverage for crop protection.

1. Choose the Right Type of Coverage

You can choose from two types of crop insurance coverage: Crop/Hail Insurance or Multi-Peril Crop Insurance.

Crop/Hail Insurance

Crop/Hail Insurance is private agricultural insurance coverage that farmers may purchase anytime during the growing season. It protects your crops from natural disasters such as drought, flood, excessive rainfall, hail, frost, and other damaging weather conditions. 

Multi-Peril Crop Insurance

Multi-Peril Crop Insurance has been available for farmers since 1938. The federal government created it to protect the agricultural industry. However, you must purchase this insurance policy by March 15 for spring crops and September 30 for fall crops.

2. Choose the Right Insurance Advisor

A crop insurance advisor is one of farmers’ most important elements in the insurance buying process. The advisor is there to guide you in the right direction and help you make intelligent decisions. Here are some tips for finding the right one:

Check Their Expertise

Make sure to ask about their level of expertise. You should have a conversation about the risks to your crops and your experience (or lack of) in identifying and managing these risks. Setting realistic expectations is essential for your farm. You want to discuss the risks and steps for resolving them.

Consider If They Offer Expedited Processing

Some crop insurance advisors may offer expedited processing and underwriting. This means that their claims adjuster and the underwriter may be able to expedite claims, saving both time and money.

See If They Are Updated with New Insurance Products

While most crop insurance advisors are up-to-date with the current insurance products, there may be new products available that you don’t know about. You may want to ask about these products to see if they can help you with additional financial protection.

3. Do Your Part

If you want to maximize crop insurance, you should also be willing to work on your end. For instance, here are things you should know.

Know Your Input Costs

When you are considering crop insurance, you must know your costs. You can’t just focus on the price of the crop yield. You also need to consider input costs, like rent, seed, fertilizer, herbicide, equipment maintenance, and labor.

Define How Comfortable You Are with Risks

You should also know your comfort level with risks. You should set a threshold for each crop to find this comfort level. For instance, you may set the loss of 10 percent of the estimated yield of your crop as a threshold.

Understand the Perils

You should also know about the perils of each crop. There are many types of crop perils, but some are common for all crops, like drought, insects, and bad weather. Make sure you know when to apply for coverage for these perils.

Final Thoughts

Choosing the best insurance coverage can be tricky when it comes to crop insurance. Every piece of information you have will help you make the best decision. Use these tips above to help you in obtaining the best coverage.

For reliable crop insurance in California, Crop Insurance Services by AMS is the perfect choice for you. We have been in the service of agriculture insurance for more than 25 years, and we are committed to continuously providing carefully created insurance solutions to help you manage risk and achieve success. Message us today for more information.

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