Crop Insurance Facelift
Knowing the new terms for combo crop insurance can simplify your decision
John Otte
Published: Jan 14, 2011
When you enroll for federally subsidized crop insurance for 2011 you
ll find that the familiar names for the various crop insurance policies will be different, although the policies themselves will be pretty much the same.
The new Common Crop Insurance Policy provisions, commonly referred to as the "Combo" policy, combine existing insurance products. The combined products allow a producer to select coverage options for yield, yield and revenue and yield and revenue with a harvest price exclusion.
The Combo policy standardizes various methods of calculating premium rates and coverage levels used for the insurance policies it replaces.
Instead of Crop Revenue Coverage (CRC), it's "Revenue Protection." Instead of Actual Production History (APH) there will be "Yield Protection." The Catastrophic (CAT) polices will be replaced by "Revenue Protection with Price Exclusion (50/100). This new "Common Crop Insurance Policy" (COMBO) kept and combined the principle features in the five plans that producers bought most often. Now all insurance coverage is consistent in insurance protection and cost to producers.
Key definitions
Revenue Protection - Insurance coverage that provides protection against production loss or price decline or increase or a combination of both.
Revenue Protection with Harvest Price Exclusion - Allows the producer to exclude the use of the harvest price in the determination of the revenue protection guarantee.
Yield Protection - Insurance coverage that only provides protection against a production loss for crops for which revenue protection is available but was not elected.
Commodity Exchange Price Provisions (CEPP) - A part of the policy that is used for all crops for which revenue protection is available, regardless of whether the producer elects revenue protection or yield protection for such crops. This document will include the information necessary to derive the projected price and the harvest price for the insured crop, as applicable.
Projected Price - A price determined in accordance with the Commodity Exchange Price Provisions and used for all crops for which revenue protection is available, regardless of whether the producer elects to obtain revenue protection or yield protection for such crops.
Harvest Price - A price determined in accordance with the Commodity Exchange Price Provisions and used to value production to count for revenue protection.
Revenue Protection Guarantee (per acre) - For revenue protection only, the production guarantee (per acre), times the greater of the projected price or the harvest price. If the harvest price exclusion option is elected, the production guarantee (per acre) is only multiplied by the projected price.
Yield Protection Guarantee (per acre) - When yield protection is selected for a crop that has revenue protection available, the production guarantee times the projected price.
Permalink: Click here
Tagged: insurance, Harvest, combine
|