What Is Crop-Hail Insurance and How Can it Protect You Against Loss?
If there’s one constant in farming, it’s that age-old unpredictability of the weather. You likely have Multiple Peril Crop Insurance (MPCI) for that very reason, to make sure you protect your crop revenue from weather-related events—not to mention other potential hazards and commodity price changes—you might face on your operation.
But what about the threat of hail? Hailstorms can cause serious damage to your crop, oftentimes destroying certain acres while leaving others relatively unharmed. Depending on your MPCI deductible and the extent of loss due to hail, it might be wise for you to obtain crop-hail insurance to better protect against risk of losses.
Here’s what you need to know about crop-hail insurance
It’s important to know how crop-hail insurance differs from MPCI coverage. First of all, a crop-hail policy is not a replacement for MPCI but rather supplemental coverage that addresses specific losses due to hail damage (and, in many cases, other perils such as fire, theft, vandalism, transit, storage structure, etc.).
Second, a crop-hail policy is not offered through the Federal Crop Insurance Corporation, and your premiums aren’t federally subsidized. It is obtained directly from a private crop insurance company, and you’re free to buy it from a different vendor from whomever sold you your MPCI policy if rates and/or coverage are more appealing elsewhere.
You can purchase crop-hail insurance at any time during the growing season—even after minor damage has occurred due to hail. You also don’t have to insure your whole operation under a crop hail policy, so you can choose coverage on an acre-by-acre basis as needed.
Another benefit to buying crop-hail insurance is that you can easily customize coverage levels to meet needs specific to your operation, including opting for lower deductibles in order to cover spot losses.
Farmers are also able to add a wind endorsement to their crop-hail policy on corn, protecting against losses suffered from greensnap due to wind damage, additional harvest expenses caused by leaning corn, etc.
When should you consider a crop-hail insurance policy and what type of coverage will work for your operation?
You still might wonder why you should add a crop-hail policy if you already have MPCI in place. But while MCPI provides general coverage for your operation, it doesn’t protect quite as well against opportunity losses.
A crop-hail policy, meanwhile, can help you manage risk of profit loss specifically caused by hail damage (in addition to other perils that might be covered under the policy).
Crop-hail insurance policies are available to farmers in all 50 states. And depending on your geographic location, there’s a pretty good chance you grow one or more crops—whether it’s corn, soybeans, wheat and/or tobacco—that are particularly vulnerable to hail damage.
If this is the case, you’ll want to consider securing a crop-hail insurance policy to protect against potential loss, especially if you’re located in a region prone to tornadoes or frequent hailstorms.
There are several types of crop-hail coverage for you to choose from, so it will be helpful to talk with an insurance agent to find the right policy for your operation. For now, here’s a quick overview of your options:
- Full/Basic crop-hail coverage provides a payment that equals the percent of loss multiplied by the insured value per acre.
- Deductible/Dollar Plans crop-hail coverage gives you the freedom to select your deductible and insured value per acre.
- Companion crop-hail coverage is supplemental, insuring the portion of your crop not covered by your MPCI policy.
- Production coverage accounts for your MPCI policy and uses your production history to set guarantees and harvested yield to determine losses.
Take control of your risk and gain greater peace of mind
Your FBN Crop Insurance agent can tailor a crop-hail insurance policy to meet the specific needs of your operation with a variety of coverages and endorsements. Sign up for a free analysis today and learn more about coverage options that will work for you.