The federal crop insurance program dates to the 1930s. Typically, crop insurance covers any loss of yield due to a peril beyond the control of a farmer, and a loss must be in excess of a certain deductible amount paid by the insured. A policy may also cover the loss of quality of production because of bad weather, or a farmer’s inability to plant during a certain season. And, federal crop insurance that covers both crop yield and price has been introduced in the last decade to cover perils insured under standard crop coverage, along with loss in value caused by a change in the market price for a crop in a given year. Federal crop insurance rates depend upon past loss experience and expected future weather. For farmers looking to learn more about federal crop insurance, a licensed independent business insurance agent can serve as a valuable resource.
As an independent commercial insurance agent who knows about federal crop insurance can explain in greater detail, between 2001 and 2007, fiscal year costs for the federal program grew from $3.16 billion to $3.94 billion. During that same period, insurance protection went from $36.73 billion to over $67 billion. From 2001 to 2007, the crop year costs went from $2.77 billion to $3.85 billion. While these numbers may seem ambiguous, an independent commercial insurance agent can take his knowledge of the federal crop insurance program and apply it in helping local farmers secure adequate crop insurance coverage.
For farmers, a local independent business insurance agent will clarify how the federal Risk Management Agency (RMA) administers the Federal Crop Insurance Corporation (FCIC), which underwrites crop insurance policies for crop producers throughout the country. An independent commercial insurance agent can sell and service a policy through the federal crop insurance program, so farmers can know that they are working with an experienced professional. A local independent insurance agent will also explain the various options for crop insurance available based on a farmer’s location, and will discuss available policy rates, and terms and limitations included in their terms.
As a licensed independent business insurance agent may discuss, crop insurance can go along with other risk management techniques used by farmers. An experienced independent insurance agent will mention how crop insurance rates can vary, and how a typical policy covers natural causes of loss, as detailed in the policy’s terms, in instances where farmers experience low yields, or loss of inventory, or if planting becomes impracticable because of weather conditions, or a natural disaster. An independent agent will also describe how different farmers have different needs when it comes to crop insurance, and how these requirements will vary based on their unique operations and budget concerns. He may note that a federal crop insurance policy is usually made up of a Common Crop Insurance Policy, endorsements and special provisions, and specific crop provisions.
A licensed independent commercial insurance agent may describe how behaviors like failing to report farm serial numbers planted to an insured crop, over- or under-reporting planted acreage per unit, or harvesting a crop in a way that is not insured under a policy can cause problems for an insured farmer, and may lead to a lower indemnity payment, or no payment at all. He might also mention how federal crop insurance coverage is not available for the same crop in every county or state, and that it is not available at all in some regions. He will also likely discuss how under most crop insurance policies, a crop year is the year that a planted crop was grown and harvested, even if the seeds were planted the prior year.
Since federal crop insurance rates differ depending on a farmer’s location, production, and the crop year, a local independent commercial insurance agent will help farmers sort through the important elements to consider in choosing a policy. A local independent insurance agent will answer farmers’ questions about crop insurance, and, if necessary, direct them to a governmental resource related to their coverage. By finding a federal crop insurance policy through a trusted independent business insurance agent, farmers know that they are buying quality coverage at a reasonable rate.
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