Farmers know that natural disasters such as fire, drought, and heavy rain can cripple their crop production for that year and future years. With many farmers dependent on a good year from their crops to survive, failure can have a devastating impact on many farms and their families. Luckily, agricultural producers, including farmers, ranchers, and others, can protect themselves against losing their crops and revenue by purchasing farm and crop insurance. When it comes to farm and crop insurance, there are three main types: multiple peril crop insurance, crop-hail insurance, and crop revenue insurance. Let’s explore both in greater detail below.
Multiple Peril Crop Insurance (MPCI)
MPCI protects farmers from crop losses caused by natural events, including disease, drought, destructive weather, fire, flooding, and insect damage. MPCI is a federal program and is regulated to ensure consistency and fairness. Insurance agents and companies, such as Knippenberg Insurance Inc. in Cumberland, MD, are licensed to sell MPCI policies. Currently, MPCI covers more than 120 different crops; however, coverage can vary from one geographic region to the next.
Crop-Hail Insurance
If you live in an area where hail is a common occurrence, you can purchase a special insurance policy to protect crops most at risk of being ruined by hail. Crop-hail insurance is often purchased as a supplement with MPCI and can be bought at any point during harvesting.
Crop Revenue Insurance
In seasons when crops produce less than expected or the price of the crop is low, crop revenue insurance can be purchased to offset the loss in revenue. Using last year’s revenue as a baseline for the current year’s, the insurance company may help cover the difference. This policy protects farmers and their earnings from inflationary swings in crop prices and poor yields.
