Weather insurance has evolved over the years. Jamie Wasemiller of The Gulke Group says the programs originally started in the 1980s in oil fields. Then it transitioned to short-season, high value crops, and now it is available for row crop growers.
Unlike most crop insurance programs, these contracts are paid on what happens with the weather and presumed damage from weather conditions. Actual yield or production is not factored into the final payments.
"With weather insurance, you can purchase a contract that covers a specific period that is important to you on your farm to maximize the best possible yields for your genetics. There are a lot of different periods of time that are important to a grower. It could be getting planted on time, the amount of moisture we receive during pollination, etc. You can actually protect these short windows."
If a producer elects to take this coverage and adverse weather conditions occur, the farmer is paid within 10-15 days of filing the claim. This can happen throughout the growing season.
Wasemiller is selling contract from WeatherBill
. According to WeatherBill CEO Dave Friedberg, the premium is set at the beginning of the growing season. Payments go to the pay premium throughout the year, which essentially acts as the deductible. Once the premiums are covered, payments are then made to farmers. If the no payment levels, or the full level of the premium isn’t met, premiums are collected at the end of the growing season.