Farmers know all about uncertainty. If the weather is too wet or too dry, too hot or too cold, they can lose crop yield. Pests and diseases can be a serious menace too. The good news is that there’s a financial solution to dealing with uncertainty in life: insurance.
The same way we buy home, car, or health insurance to protect us in case of disaster, farmers can buy crop insurance to protect themselves against problems with their harvest. Here’s everything you need to know about crop insurance, from how it works to how you buy it.
Your Crop Insurance Options
There are two main kinds of crop insurance available: crop-hail and multiple peril. Crop-hail is a private insurance product that farmers can buy at any time in the growing season to protect themselves against specific kinds of natural disasters — specifically hail and fire damage, though other kinds of damage are sometimes included. It covers just about any crop, and you can choose coverage acre by acre in order to protect an especially valuable or high-yield crop.
Multiple peril crop insurance, on the other hand, is administered by the USDA’s Federal Crop Insurance Corporation. To stabilize risk across America’s vital growers, the government set up and subsidizes this insurance program. Farmers must buy their policy before planting, and it largely covers the four major crops: corn, wheat, soybeans, and cotton (though other crops may also be covered in certain regions). However, multiple peril insurance covers just about every possible natural disaster that can lower yields. It also usually protects farmers against unexpected price drops. Fifteen private companies write these policies, but the government sets rates and requires them to cover all eligible farmers.
The Right Crop Insurance
When you speak with your crop insurance broker or agent, they’ll take you through all your options. One of the most popular multiple peril products in recent years is Revenue Protection (RP). The farmer chooses an amount to insure based on their past average production history, and they receive a payout if they lose revenue based on price fluctuations or a lower-than-usual yield. This kind of insurance helps to guarantee a steadier revenue year to year, eliminating some of the natural ups and downs that come with the territory of farming.
No matter the size of your farm, no matter what you grow, and no matter your needs, the insurance experts at Equity Bank have you covered. We’ll see you through the whole process, from initial contact to final policy, helping you get the right product at the right price. Get in touch with us today and start protecting your livelihood.