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Farm Insurance and Crop Protection
September 16, 2021

Farm Insurance and Crop Protection

We all know that the weather is fickle and can ruin a picnic or a vacation. Having those events ruined is no fun, plus it’s inconvenient. But for a farmer, the fickle weather can be much more than inconvenient; it can be devastating. Weather can ruin a crop or reduce the yield. So, what can a farmer do for protection? 

That is what crop insurance is all about. Crop insurance is designed to protect a farmer’s investment in case there is a natural disaster that affects profits. 
Corn Field
Here are three types of crop insurance: 

  1. Multi-peril: Multi-peril crop insurance is just that. It protects against multiple types of natural disasters. These include hail, drought, freezing weather, floods, fire, insects, disease and wildlife.  

  2.  Hail: This insurance covers crops, or portions of crops if they are damaged by hail. Besides what is covered, the main difference between hail insurance and multi-peril insurance is that hail insurance is not part of the Federal Crop Insurance Program.

  3.  Revenue: This type of insurance is not as cut and dry as the other two. Crop revenue insurance is based on how much the farmer’s revenue deviated from the average revenue. Basically, what happens is the Risk Management Agency will take the price corn should sell for, combined with what the farmer should harvest to determine estimated revenue. If a farmer does not get that revenue, then the crop insurance will pay the difference. However, this does not cover loss of revenue due to a farmer simply not harvesting a field. This type of insurance is also based on one growing season and does not cover a span of growing seasons.

That is the basic premise of those types of crop insurance. The best way to understand what you need to protect yourself from the fickleness of weather is to talk with your independent insurance agent. 

Tags: Farm Insurance

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