Crop insurance coverage: What you need to know and why you should review

The clock is ticking. Book an appointment to meet with your insurance agent to review your crop insurance coverage today. March 15, 2024, is the deadline to make changes to your current policy for the upcoming year or to start a new policy.

Why should you review crop insurance coverage?

We get it. Reviewing your coverage is yet one more thing on your to-do list. But if you stick to the same plan, year in, year out, you could be leaving money on the table and increasing your risk. Because the changes you’ve made to your operation as well as shifts in the markets affect how well the coverage meets your needs.

• Operational changes: Does your current plan factor in any operational changes you’ve made? Adding employees and investments in new equipment change your risks and liabilities.
• Market changes: As market commodities and inputs change, so do your coverage needs. If you sit down with a licensed agent, you’ll get the latest on coverages, policies and programs that benefit your operation.

Crop insurance coverage: The basics

The following is a selection of federal and federally backed insurance plans. With the help of your crop insurance specialist, you can determine which combination of insurance plans and federal programs provide the best protection for your operation.

Multi-Peril Crop Insurance

• Supported and regulated by the federal government, but sold by private insurance.
• Covers losses and lower yields caused by acts of nature, including drought, frost, wind, fire and insects.
• Choose from several coverages and price levels to manage your risk.

Margin Protection

• Protects against margin decreases caused by: reduced county yields, reductions in commodity prices and/or increased prices of qualifying inputs.
• Coverage for corn and soybeans in Minnesota and South Dakota, and selected counties for spring wheat.
• Can be purchased alone or with Yield Protection or Revenue Protection policies.

Revenue Protection

• Insures against yield losses caused by natural causes, or revenue losses from changes from projected price to harvest price.
• Farmers select the percentage of the revenue guarantee to insure.

Yield Protection

• Insures farmers against yield losses.
• Farmers select the percentages of average yield and project price to insure.
• Price is based on futures market prices.

Area Risk Protection Insurance (ARPI)

• Coverage for widespread losses of revenues or yields, typically within a county.
• Does not over cover replant, late planting or prevented planting.
• Has reporting requirements for annual yield history and acreage.
• Price is set annually by the Risk Management Agency (RMA).

Whole-Farm Revenue (WFRP)

• Insures all commodities on the farm in a single policy, insurable crops and livestock.
• In 2023, a policy change allows more farmers to participate: The maximum insurable review increased from $8.5 million to $17 million.

Federal ARC and PLC

If you haven’t already, the deadline is also March 15 to enroll in Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) from the Department of Agriculture’s (USDA) Farm Service Agency (FSA). This program provides financial protection against market fluctuations for commodity crops. Enrolling in these programs can affect your eligibility for other insurance coverages. Your insurance agent can provide guidance.  

Crop Hail Insurance 

It’s counterintuitive, but Multi-Peril does not cover hail damage. But you can purchase it from private insurers and there’s no hard deadline to opt in to coverage. If you haven’t made up your mind about crop hail coverage, here’s a fact to consider: In 2022, Minnesota had 387 major hail events, the third highest in the U.S. behind Texas and Nebraska.

Crop Insurance Decision Tool 

The 2024 Crop Insurance Decision Tool from the University of Illinois is a great place to start reviewing your coverage. This tool helps you calculate premiums, evaluate insurance payments, and provides the historical data for your decision-making. So once your insurance review appointment is on the books, spend time exploring your options and note any questions you may have for your agent.

Schedule your review today

Minnwest Insurance Agency is an Approved Insurance Provider (AIP) with the Risk Management Association. Our independent agents live and work in your community. Our knowledge of the local agricultural economy and the challenges producers like you face equip us to help you create the best risk management strategy for your operation.

Contact an insurance agent today.

This institution is an equal opportunity provider and employer.