Farmers are subject to a variety of risks that can affect crop yields and income. Crop insurance is a type of insurance that helps farmers mitigate these risks by providing coverage for losses due to natural disasters, pests, and other unforeseen events. Let’s learn more about it!
Who Needs Crop Insurance?
Crop insurance is essential for farmers who rely on their crops for income. It is particularly important for farmers who grow crops in areas that are prone to natural disasters, such as hurricanes, floods, droughts, or wildfires. Crop insurance can also benefit farmers who grow crops that are vulnerable to pest infestations or other unforeseen events that can affect yields.
Types of Crop Insurance
There are several types of crop insurance available, each designed to meet the specific needs of different types of crops and farmers. Some of the most common types of crop insurance include:
- Multi-Peril Crop Insurance (MPCI): This type of insurance provides coverage for losses due to natural disasters, such as drought, flood, or hail. It covers a wide range of crops, including corn, wheat, soybeans, and cotton.
- Crop Revenue Coverage (CRC): This type of insurance provides coverage for losses due to a decline in crop prices or yields. It covers a wide range of crops, including corn, wheat, soybeans, and cotton.
- Whole-Farm Revenue Protection (WFRP): This type of insurance provides coverage for losses due to a decline in revenue from all crops and livestock produced on a farm. It is designed for diversified farms that grow multiple crops and raise livestock.
- Area Risk Protection Insurance (ARPI): This type of insurance provides coverage for losses due to a decline in yields or revenue in a specific area. It is designed for farmers who grow crops in regions that are prone to natural disasters or other risks.
How Much Does Crop Insurance Cost?
The cost of crop insurance varies depending on several factors, such as the type of insurance, the level of coverage required, the location of the farm, and the type of crops grown.
A professional agent from General Liability Insure will take into account all those aspects and provide you with a list of policies that are best adjusted to your business and its individual needs.
Crop Insurance – Risks & Exposures
Crop insurance is associated with several risks and exposures that farmers should be aware of. These include:
- Natural disasters: Crop insurance may not provide coverage for all types of natural disasters. Some policies may exclude certain events, such as floods or earthquakes, or may have limits on coverage.
- Crop failures: Crop insurance may not cover losses due to crop failures caused by poor management practices, such as inadequate irrigation or fertilization.
- Changes in crop prices: Crop insurance may not cover losses due to changes in crop prices that are not related to crop yields or natural disasters.
- Administrative costs: Crop insurance policies may have administrative costs that add to the overall cost of coverage.
Commercial Insurance And Business Industry Classification
- SIC CODE: 0111 Wheat, 0112 Rice, 0115 Corn, 0116 Soybeans, 0119 Cash Grains, Not Elsewhere Classified, 0191 General Farms, Primarily Crop
- NAICS CODE: 111110 Soybean Farming, 111120 Oilseed (except Soybean) Farming, 111130 Dry Pea and Bean Farming, 111140 Wheat Farming, 111150 Corn Farming, 111160 Rice Farming, 111191 Oilseed and Grain Combination Farming, 111199 All Other Grain Farming
- Suggested ISO Farm and Commercial General Liability Code(s): 06518, 06519, 06618, 06619, 06718, 06719, 06818, 06819
- Suggested Workers Compensation Code(s): 0037 Farm – NOC & Drivers
Crop Insurance – The Bottom Line
Crop insurance is essential for farmers who rely on their crops for income. Multi-peril crop insurance, crop revenue coverage, whole-farm revenue protection, and area risk protection insurance are some of the types of crop insurance available.
It is essential for farmers to evaluate their risks and exposures carefully and obtain adequate crop insurance coverage to protect themselves from unforeseen events that can affect crop yields and income. However, you don’t have to do it on your own – our independent agents are ready to help you anytime!