Crop insurance is a form of insurance specific to farmers that will help them from economic damages that are incurred from anything from a radical drop in crop prices to the inability to plant seeds due to drought.

The government subsidizes crop insurance with private companies providing policies; and those policies are than supported by the government. There are a variety of insurance products available to farmers dependent on things like:

• Type of crop grown
• Location of farm
• Coverage needed

Most services are provided by insurance companies that specialize in crop insurance and the related insurance products.

Importance of Crop Insurance

Farming is a business that is very risky. Anything adverse condition wise; such as a sudden:

• Frost
• Hail
• Thunderstorm
• Drought
• Tornado

All of these things can cost the farmer a season’s crop and even if the weather is escaped there are a multitude of other things that can destroy a farming season, like:

• Falling crop prices
• Rising costs of both equipment and supplies
• Rising transport expenses

The purpose of crop insurance is to reduce the financial risk of farming so that farmers can focus on harvesting their crops rather than worrying about every possible situation that can go wrong and spell financial ruin.

Coverage Specifics

Whenever a crop insurance policy is written it establishes the specific crop that is being insured as well as the nature of the coverage.

The most basic coverage is going to provide payout should the crops be damaged as a result of the weather, pests, disease or wildlife. There are more expansive policies that are able to include insurance measures that can protect the farmer if they are forced to plant late in the season or even not at all due to the weather.

It’s possible to have policies that will include measures designed to protect the farmer from fluctuations in revenue. Upon purchase of the policy the insurer (insurance company) can determine the fair price for the crop and if the farmer doesn’t get that price when going to market the insurance policy will provide a payout. The insurer can also provide coverage against revenue losses that are caused by a harvest that is smaller than expect as well as other problems.

Any good crop insurance policy is going to have very few exclusions and your insurance agent should have a detailed discussion of all available coverage.

Importance of Specialized Agents

Crop insurance is a very complex process and for that reason farmers like and should work with a specialized crop insurance agent when purchasing a policy. The agent will be able to discuss all options, provide estimates of premiums in a variety of levels as well as their recommendations about the best insurance to purchase.

As with all insurance premiums the cost of the premium should be weighed against any potential financial damage that would occur without having the insurance policy.