Protecting crops is vital to the livelihood of growers, farmers, and producers throughout the United States. Crop insurance plans are a vital tool for risk management that protects producers from crop loss and revenue fluctuations due to natural disasters. However, if you’re still asking, “what is crop insurance”, this post is for you!
What is crop insurance?
Within the United States, there are two main categories of crop insurance include crop-yield insurance and crop-revenue insurance. Crop-yield insurance protects farmers against low yield due to eligible causes. Crop revenue offers a guaranteed minimum income threshold to growers and farmers, based on both yield and crop value price factors.
Under these two categories, yield-based crop insurance and crop revenue insurance, there are many various types of insurance plans.
Yield protection crop insurance plans
Named-Peril Crop Insurance protects you from losses due to specific threats like crop hail damage, grain fires, citrus freezes, and more. This type of insurance is also called “single-peril crop insurance.”
Multiple Peril Crop Insurance (MPCI) is offered through the Federal Crop Insurance Program (FCIP). This type of crop insurance plan protects you from a number of specified threats to your revenue and expected yield.
Crop-Hail Insurance is offered through, and underwritten by, private insurers to protect farmers from a single peril like hail, fire, and wind damage.
AMS Crop Insurance For Wine Grape Growers protects wine grape growers against market declines, yield flux, and quality damages from natural events.
Revenue-based crop insurance plans
Whole-Farm Revenue Protection is designed to insure farming operations and assets against covered losses. WFRP insurance is often combined with MPCI insurance plans to provide a customized solution.
A Revenue & Yield Protection Plan Blends combine revenue and yield crop insurance plans into a customized solution to fit client needs.
Area-based crop insurance plans
Pasture, Rangeland, & Forage (PRF) Insurance is an area-based plan that protects farmers against unexpected drought, precipitation declines, forage losses, destocking, and feed cost increases.
How does crop insurance work?
Crop insurance, according to the Risk Management Agency (RMA) division of the USDA, is “a contract between insured farmers and crop insurance providers.” When a farmer insures their eligible crops, the insurance provider protects that farmer against losses in the insured area within the specified period. In exchange for this protection, farmers pay a premium each month, as well as a crop insurance deductible. Losses exceeding the deductible amount are covered by the agriculture insurance provider.
How did crop insurance begin in the United States?
The Federal Crop Insurance Act, passed by Congress in 1938, established the first subsidized crop insurance program for farmers in the United States.
To increase participation among U.S. growers, the federal government established the Federal Crop Insurance Program in 1980. The Federal Crop Insurance let government and private insurance companies work together to provide farmers and growers with affordable, accessible crop insurance solutions.
Contact Us To Get Started In Crop Insurance
Over the years, our clients have trusted in our undying dedication to unparalleled service and customized crop insurance protection. Since our very first day, our defining difference has been our commitment to protecting the livelihood of American growers and producers. For over 25 years, we’ve tailored risk management solutions to our clients needs, so they have peace of mind if the worst happens.
Our grower-first mindset has guided each of our staff, from our leadership staff to our crop insurance agents, to deliver great client service. If you’re interested in obtaining crop insurance, contact us today! We’re ready to tailor a crop insurance coverage plan that fits your needs and gives you peace of mind.