Insurance Basics (according to Hamilton Insurance)

Coverage Available: YP - a yield only type of coverage - RP - revenue based products. CAT is the lowest level of YP (a 50/55 level where the 50 is the percent of your average production guaranteed, and the 55 is the percent of the set price your loss would be paid at – costs you $300 per crop per county. Buy-up is available with yield and/or revenue plans from 50% through 85%, with premiums rising accordingly.

Eligibility – Crop insurance is still available to basically everyone, but ……. The subsidy amounts which make it affordable, are not available unless you are in “Conservation Compliance” and have a current FSA form 1026 on file.

Perils - Crop insurance covers losses due to any act of God, and with revenue coverage, can help protect against crop price swings. Corn harvested as silage or high moisture, it must be appraised before harvest– whether you have a claim or not.

Counties: You must have a separate policy for each county where you farm - this is governed by where the land is physically located, not which FSA office you report. You must insure all acres of a covered crop that are within that county.

Unit Structure: BU (Basic Unit) all of the crop within the county is lumped together – CAT has no unit choice since BU is the only choice with that coverage level. OU (Optional Unit) means that you could insure farms separately – these must be set up before planting, and the premiums are significantly higher than BU. EU (Enterprise Units) – also lumps all of the crop into one unit for loss purposes, but there is a large extra subsidy that brings the premiums to even less than the BU. There are qualifying requirements for both OU and EU. We always try to quote all three choices.

Timely Planting Dates: In Ohio 5 June for corn and 20 June for beans – oats are 10 May. Pa. uses 10 June for both corn and beans. You still have coverage for any crops planted after those dates, but your guarantees are reduced by 1% per day on those crops.

Replant Payments: All levels above CAT - pays 8 times corn price or 3 times bean price per acre -20/20 rule applies- must be 20% of the unit or 20 acres whichever is less for a payment. Supplemental replant coverage dollars can be added if it is a concern.

Prevented Planting (PP): If you are unable to plant, and it’s a “general condition to the area”, you can declare a prevented planting loss once we pass the timely planting dates. PP is included with all levels of coverage, and basically pays you around 60% of what your normal coverage would have paid on those acres. Same 20/20 rule applies, and even though “they” have continued to tweak the liability amounts, in many of our insured areas, it is a very valuable part of the coverage.

Billing: Premiums are quoted in terms of your actual cost on the actual number of acres you report as planted or PP - the Federal subsidy pays approx. 60% of the total premiums and some states (Pa.) kick in an added subsidy. No money is due up front, with premiums due “more or less” after harvest.

Most important insured responsibility: Acreage reporting must accurately (i.e. FSA acres –not planter acres) reflect all acres planted or PP acres.