A Guide to the Unique World of Crop Insurance

In the world of agriculture crop insurance is a recent development. Insuring a farmer’s crops has always been a difficult endeavor, there are far too many risk factors to make insurance companies comfortable. However, as a crop equals a farmer’s livelihood, offering some form of protection against disaster is mandated. Therefore, the U.S. government has been volleying legislation around to provide just that. Crop insurance has been a topic since 1980, and much legislation has been attached to it. In its current form, derived from the Agricultural Risk Protection Act of 2000, the ability to gain crop insurance is a whole lot easier. It is still an involved process however, and not an easy to accomplish at that.

What Exactly Is Crop Insurance?

The easiest answer to provide is insurance for crops. The more involved answer deals with the two main types available to most American farmers. Crop-Hail and Multi-peril insurance are the two basic plan types the U.S. has made available. Both offer coverage, akin to any traditional form of insurance, for crops that a farm yields. Should the crops be damaged or destroyed by applicable means, then the insured farmer receives a settlement to cover the damages. Just like auto or home insurance accept this focuses on crops like corn, okra, potatoes, etc.

Crop-hail insurance is for areas of the country that have a lot of hail. Hail can prove particularly damaging to a growing crop, so insuring against a hail storm, in an area known for hail is a good idea. Crop-hail can be purchased at any time and covers high-yielding crops. Multi-peril or MPCI must be purchased before planting the crop. This protects against all kinds of natural causes. This fully protects the crop from freeze, storm, high-moisture, and disease. Some newer policies even extend that protection to market price. Should the price fluctuate damaging the crops potential profit, the farmer would be covered for the loss.

Crop Insurance Agencies

The development of crop insurance has created a whole new industry. At the center of this industry is the Federal Crop Insurance Corporation. The FCIC provides checks and balances for crop insurers and ensures that no products enter the field that have not been vetted. Under the FCIC are all the various insurance companies that provide Agricultural Crop Insurance. There are a lot to choose from. It is here that crop insurance begins to become like regular insurance. To get it you must talk to an agent, they will then set up a policy. The policy will have mandates specific to the company and the company will charge premiums. Luckily, crop insurance must remain the same company to company, so you will never be suckered in to a higher price.

Crop insurance covers a wide range of crops but does not cover all of them. Some are insurable under specific plans but are not available under others. You always need to look for the plans that specifically fuel your needs. The main thing to look for in an agent is reliability, so always fully vet the company you intend to do business with.

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