CROP INSURANCE COVERAGE COMPARISON GUIDE
By Dean Strasser, NCIS
The NCIS Crop Insurance Plan Comparison is a popular NCIS product designed for use as a quick reference for crop insurance personnel, crop insurance agents, and producers. The comparison is a thorough, yet compact, list of major crop insurance plans of coverage available on a national basis. Please note the products and product topics summarized in this chart are NOT all-encompassing and DO NOT substitute for policy provisions. Please refer to the policy provisions and/or contact your company for a complete description of the available coverages, terms and conditions.
YIELD PROTECTION YP-01
YP provides protection against a loss in yield due to unavoidable, naturally occurring events. For most crops, that includes adverse weather, fire, insects, plant disease, wildfire, earthquake, volcanic eruption, and failure of the irrigation water supply due to a naturally occurring event. Like the APH (Actual Production History) plan of insurance, YP guarantees a production yield based on the individual producer's APH. READ MORE HERE.
REVENUE PROTECTION RP-02
Revenue protection provides protection against a loss of revenue caused by price increase or decrease, low yields or a combination of both (for corn silage and rapeseed, protection is only provided for production losses). This coverage guarantees an amount based on the individual producer's APH and the greater of the projected price or harvest price. Both the projected price and harvest price are established according to the crop's applicable commodity board of trade/exchange as defined in the Commodity Exchange Price (CEPP). READ MORE HERE.
RP with Harvest Price Exclusion RP-HPE-03
RP HPE is similar to RP, however RP HPE coverage provides protection against loss of revenue caused by price decrease, low yields or a combination of both. Unlike RP, the revenue protection guarantee for RP HPE is based on the projected price only and it does not increase based on a harvest price. READ MORE HERE.
AREA YIELD PROTECTION AYP-04
AYP coverage is based on the experience of the country rather than individual farms. Maintaining the insured's actual production history is now mandatory and may be used by RMA as a data source to establish and maintain the area programs. AYP indemnifies the insured in the event the final county yield falls below the insured's trigger yield. The Federal Crop Insurance Corporation (FCIC) will issue the final county yield in the calendar year following the crop year insured. READ MORE HERE.
AREA REVENUE PROTECTION ARP-05
Like the other area plans, ARP is based on the experience of the county rather than individual farms. Coverage is provided against loss of revenue due to a county level production loss, a price decline, or a combination of both. Upside harvest price protection is included which increases the policy protection at the end of the insurance period if the harvest price is greater than the projected price and if there is a production loss. READ MORE HERE.
AREA REVENUE PROTECTION WITH HARVEST PRICE EXCLUSION ARP-HPE-06
Like AYP, ARP-HPE is based on the experience of the county rather than individual farms. Maintaining the insured's actual production history is now mandatory and may be used by RMA as a data source to establish and maintain the area programs. An ARP-HPE policy provides protection against loss of revenue due to a county level production loss, price decline, or a combination of both. READ MORE HERE.
ACTUAL PRODUCTION HISTORY APH-90
APH is the oldest insurance product listed on this comparison. The APH plan of insurance provides protection against a loss in yield due to nearly all natural disasters. For most crops, that includes drought, excess moisture, cold and frost, wind, flood and unavoidable damage from insects and disease. Like YP, the APH plan of insurance guarantees a yield based on the individual producer's actual production history. READ MORE HERE.
STACKING INCOME PROTECTION PLAN STAX - 35/36
The Stacked Income Protection Plan (STAX) is a new product for upland cotton introduced in the 2014 Farm Bill, which will go into effect beginning in 2015. STAX provides protection against natural causes of loss that cause county revenue to fall below a county loss trigger. STAX indemnities are not based on individual experience. READ MORE HERE.
SUPPLEMENTAL COVERAGE OPTION SCO - 31/32/22
The Supplemental Coverage Option (SCO) is new, an endorsement introduced in the 2014 Farm Bill, which will go into effect beginning in 2015. SCO protects against widespread loss of yield or revenue in a country by providing coverage for a portion of the deductible of the underlying YP, RP, or RP-HPE crop insurance policy. READ MORE HERE.
Enhanced Coverage Option
General Information
The Enhanced Coverage Option (ECO) is a new crop insurance option that 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 percent trigger levels. Trigger means the percentage of expected yield or revenue at which a loss becomes payable. READ MORE HERE.
CROP HAIL INSURANCE
Crop Hail is an insurance product that is not subsidized or regulated by the government under the Federal Crop Insurance Program. Unlike the Multiple Peril Crop Insurance policies of the federal program, Crop Hail policies can be purchased at any time during the growing season (time limits will apply on some wind exposures). It is written by private insurance companies who offer coverage to growing crops with various coverages depending on the state, crop, and endorsements selected. It is a beneficial coverage for crops when the yield is reduced by the primary causes of hail or fire. READ MORE HERE.
Margin Protection plan of insurance
Margin Protection (MP) is an area-based insurance plan that provides coverage against an unexpected decrease in operating margin (revenue less input costs), caused by reduced county yields, reduced commodity prices, increased prices of certain inputs, or any combination of these perils. Since Margin Protection is area-based (average for a county), an individual farm may have a decrease in its margin, but may not receive an indemnity or vice-versa. READ MORE HERE.
ARC or PLC? Informational Video
Farm Management Specialist Steve Johnson from Iowa State University lays out the basics and where to start your decision. Watch the entire video here.