5 Crop Insurance Myths Busted

When production is low or damaging weather such as floods, drought, hail, or wind storms come along, it can be devastating to production agriculture. Crop insurance protects farmers so they can financially meet both their personal and business obligations, helping to ensure survival of their farming business.

Although crop insurance sounds like an obvious purchase, some farmers still hesitate to purchase a policy because they fear they won’t be covered or it is too complicated. We’ve busted a few common myths below to help clarify.

MYTH #1: I HAVE MOSTLY IRRIGATED GROUND – THAT IS MY INSURANCE.

FACT: As we saw this past year, excess moisture can really cause problems for farmers. It can delay planting and harvest, wash out planted crops, or create the perfect environment for plant disease.

Crop insurance covers anything that is a natural cause of loss. This means too much rain, not enough rain, plant disease, hail, and wildlife damage. Additionally, most policies include replant or preventive planting coverage, both of which people needed & benefited from this past year.

MYTH #2: THERE ARE TOO MANY RULES AND I CAN’T MAKE A POLICY WORK FOR MY NEEDS.

FACT: That may have been true in years past, but over the last few years, many new options have been introduced that help tailor a policy to meet your needs.

Now, you have the ability to insure your irrigated and non-irrigated crops under different coverage levels and different unit structures. Make sure to talk to your agent about the Trend Adjusted Option and the Yield Exclusion Option; both help enhance your Actual Production History (APH).

There are policies available for many different crops, not just grain. Whole Farm policies cover diverse operations that produce crops that are otherwise uninsurable. Producers can now purchase the new Dairy Revenue Policy to protect their dairy operation.  There are policies for hay and pasture, nurseries, orchards, and processing vegetables.  Grapes are now insurable in several Maryland and Virginia counties.  Written agreements can be used to cover crops that are not insured in your county, but are available elsewhere in the country. This would allow us to use that state/county policies’ rules and regulations to insure the crop here with approval from the Risk Management Agency (RMA).

MYTH #3: I HAVE TO USE THE COUNTY AVERAGE IN SETTING UP PRODUCTION HISTORY.

FACT: Your agent should use your historical records to set up a policy whenever possible. If you can’t provide history, a percentage of the county yield is used to establish your APH until you can start providing your own production records. 

MYTH #4: IT DOESN’T PAY.

FACT: As of February 4, 2019 Maryland farmers have paid $10.6 million in premiums out of pocket for 2018 crops and received over $16.5 million in claim payments.

MYTH #5: IT COSTS TOO MUCH.

FACT: Crop Insurance is federally subsidized, making the rates affordable. Premium on a 70% coverage level policy is subsidized at 59%.

Now that we’ve sorted through the myths of crop insurance, give our team of experts a call today to discuss your policy options. We’ll help you prepare for the unexpected. Our friendly, knowledgeable staff has over 25 years of policy writing experience.  We want to be more than simply your agent – we want to be a valuable resource for you and a consultant on your team.