Hail, wind and fire: Tailoring coverage to your needs

Weather threats are not all equal. For instance, hail has the unique ability to totally destroy a significant part of a planted field while leaving the rest undamaged. Other perils, such as wind and wildfire, are more common in some regions than in others.

Supplemental and Crop Hail policies offer protection above and beyond the federal government program, allowing producers to tailor their coverage. Are you familiar with the specialized products that may help you sleep at night?

Supplemental policies differ from year to year and from one insurance provider to another. That’s one reason Frontier Farm Credit works with multiple companies, according to Tony Jesina, Frontier Farm Credit vice president, related services. “Our insurance team works closely with customers to identify their individual needs and risk tolerance and to find the right combination of federal and private policies, balancing coverage needs and costs.”

Supplemental policies include:

  • Yield protection plans, including buying up to a higher projected price, yields on an acre-by-acre basis, and a plan that lets you add on to one of the government’s county-based revenue programs;
  • Revenue protection: Increase your price or revenue guarantee or choose a dollar value per acre;
  • Price discovery (discovery period different from the government’s or based on different sources of prices);
  • Supplemental replant;
  • Enterprise Plus: acts as an Optional Unit, allowing different guarantees for each individual unit for producers who elect an Enterprise Unit on their federal crop insurance policy.

Crop Hail policies

Crop Hail policies are off­­ered by all of the companies we work with. For most producers, Crop Hail is an add-on to multi-peril insurance to offset the deductible and provide protection up to the actual cash value of the crop.

Crop Hail policies:

  • can be purchased or added to during the growing season, as long as damage has not already occurred;
  • can cover the entire value of the crop;
  • provide coverage acre by acre, so damage that occurs on only a part of a farm may be eligible for payment even though the rest of the unit is unaffected;
  • are based on a dollar amount of coverage the producer chooses;
  • protect against named perils, not only natural perils.

Crop hail coverage varies among firms and contracts. For instance, you can choose full, deductible, companion or production hail coverage. You also can add products such as green snap.

Production Hail is a specific type of Crop Hail policy. It protects the top portion of your crop – the portion where profits often are counted. You can choose percent of APH in 5 percent increments from 100 to 125, depending on company and state. You also choose 1 percent to 100 percent of the government guaranteed price.

Consider an example, for instance, where a producer has a 150-bu. Actual Production History (APH) and the government price coverage is $4. We assume this grower chooses a 115 percent Production Hail policy. As the drawing below illustrates, his policy would cover the 37.5 bu. not covered by MPCI, plus an additional 22.5 bu. His protection would increase from $450 to $690/acre.

As mentioned earlier, the producer can choose different combinations of percent of APH and percent of price, meaning a wide array of possible coverage options.

If you would like to learn more about any of these types of policies might fit your operation, contact your local Frontier Farm Credit office or call 800.397.3191 today!

Our crop insurance team spends all day, every working day, on crop insurance. It’s not just something they do – it’s all they do. Our goal is to match the right products to your needs.