A comprehensive crop insurance plan creates a great foundation for your farm. It helps you manage risk and determine what other marketing tools to use.
Beyond the traditional crop insurance programs, you can select some non-traditional and/or private products for additional coverage.
“These products tend to cover shallow losses,” says Jamie Wasemiller, market analyst for Gulke Group and crop insurance agent with Silveus Insurance Group. “They provide select bands of coverage that go above normal multiple peril crop insurance (MPCI) levels.”
These highly customizable products, he says, can create opportunities to collect premiums at a higher value.
Wasemiller presented a session on 2022 crop insurance options during the Online Top Producer Summit. Learn more here.
Here are a few products to consider:
1. Supplemental Coverage Option (SCO) is a county-level crop insurance option that provides additional coverage for a portion of your underlying crop insurance policy deductible. Producers must buy it as an endorsement to either the yield protection, revenue protection or revenue protection with the harvest price exclusion policies. SCO provides coverage across a band below 86% of the county level coverage and is limited to acres enrolled in the PLC program.
2. Enhanced Coverage Option (ECO) provides additional area-based coverage for a portion of your underlying crop insurance policy deductible. It must be purchased as an endorsement to the yield protection, revenue protection, revenue protection with the harvest price exclusion, actual production history or yield based dollar amount of insurance policy. ECO offers producers a choice of 90% or 95% trigger levels. Trigger means the percentage of expected yield or revenue at which a loss becomes payable. ECO can be used with PLC or ARC.
3. BAND coverage protects against shallow losses and provides input cost recovery. A lower deductible translates to a higher trigger for your indemnity, providing support exactly when it is needed. With BAND, you can buy higher or lower bands of coverage.
4. RAMP supplements your MPCI coverage and is designed to help provide additional coverage when production and/or revenue losses are just over or under an insured’s MPCI guarantee. You can choose from these options:
- RAMP Yield (RY) is a plan that pays based on where the production to count (harvested bushels) falls within or below the selected coverage band.
- RAMP Revenue (RR) is a plan that pays based on where the harvest revenue falls within or below the selected coverage band.
5. Increased Coverage Election (ICE) supplements the coverage provided by the MPCI policies. It supplements your protection through either increasing the price election selected on an applicable underlying MPCI or supplements the MPCI coverage with additional coverage against yield loss and/or revenue loss within a selected coverage band.
“Don’t let the fact that there’s so many options scare you,” Wasemiller says. “Your agent can show you some numbers.”
When meeting with your agent to discuss options, have both your cost of production for each crop and your realistic income goals, he says. This will help your agent find programs that match your goals.
“A good insurance program along with using other marketing tools can create an effective risk management plan in 2022,” Wasemiller says.
You can still register for the Online Top Producer Summit, which gives you access to content through March 31. Use the code “VIRTUAL” to take 50% off your registration fee.
Read more coverage of the Top Producer Summit.
