Catastrophic Crop Insurance: Eligibility and Policy Terms Explained

To be eligible for catastrophic crop insurance, you must have a production history in the crop you're insuring, with a minimum of $10,000 in agricultural gross income from farming-related activities in at least one of the last two crop years.

The policy terms are also crucial to understand, and one key aspect is the 50/55 rule, which requires you to have a minimum of 50% of the crop's average yield and 55% of the crop's average price to receive a payout.

The premium for catastrophic crop insurance is relatively low, around 0.5% of the insured value, but the coverage is limited to 50% of the crop's actual production history.

To give you a better idea, let's consider an example: if you have a crop worth $100,000 and the insurance coverage is $50,000, you'll only receive 50% of the actual production loss, up to the policy limit.

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Crop insurance options can be tailored to meet specific needs, such as insuring high-risk land separately from the rest of the crop.

For example, you can purchase additional coverage for a crop and designate specific acreage as "high-risk" land, which can be insured under catastrophic risk protection coverage.

You'll need to execute a High-Risk Land Exclusion Option and obtain a separate policy from the same insurance provider to do so. This will come with an additional administrative fee.

Producers of certain crops, like apples and grapes, can automatically receive a rider covering their trees or grapevines if they purchase yield insurance.

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If you're an apple, grape, or tender fruit producer, you might be interested in production loss coverage. This type of insurance can provide financial protection against crop failures.

Producers who purchase yield insurance can automatically receive a rider covering their trees or grapevines. This is a convenient option for those who already have yield insurance.

You can choose from two deductible options, which are both cost-shared with the government. The standard deductible option is tied to the catastrophic production loss cost-sharing ratio.

The optional lower deductible is incrementally cost-shared at a different ratio, which is also tied to the catastrophic production loss cost-sharing ratio.

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The catastrophic risk protection endorsement is a crucial part of crop insurance, and understanding it can help you make informed decisions about your farm's insurance needs.

This endorsement is part of the Federal Crop Insurance Act of 1994, which requires farmers and landlords participating in certain programs to obtain a minimum level of crop insurance, known as catastrophic coverage level (CAT coverage).

The catastrophic risk protection endorsement is used to resolve conflicts between different policy documents, and it outlines the order of priority for resolving these conflicts.

The order of priority is: the catastrophic risk protection endorsement, special provisions, actuarial documents, the Commodity Exchange Price Provisions, and finally, any of the policies specified in section 2.

This means that if there's a conflict between your policy and the catastrophic risk protection endorsement, the endorsement takes precedence.

You can learn more about the catastrophic risk protection endorsement and how it affects your crop insurance by consulting the relevant policy documents or speaking with a qualified insurance agent.

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To be eligible for catastrophic crop insurance, you must have one of the following policies in force: the Common Crop Insurance Policy, the Area Risk Protection Insurance Policy, or other crop policies that provide catastrophic risk protection coverage.

You'll need to have 100% crop share in a county to be considered a unit for catastrophic risk protection coverage. A unit can also be all insurable acreage of the insured crop in the county if you own the land and operate it on a share basis.

The administrative fee for catastrophic coverage is $50 per crop per county, with a maximum cost not to exceed $200 per producer per county, or $600 per producer if farms are in several counties.

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The Department of Agriculture's Office of the General Counsel (OGC) issued a report, OGC-98-69, on August 17, 1998, highlighting the importance of policy details in agricultural programs.

The report noted that the Department of Agriculture had not ensured that all of its programs were in compliance with applicable laws and regulations, leading to a lack of transparency and accountability.

Agricultural programs that received funding from the government were not properly monitored or evaluated, making it difficult to determine their effectiveness.

The report found that the Department of Agriculture had not developed adequate policies and procedures for managing and tracking funds, leading to potential mismanagement and waste.

The OGC-98-69 report recommended that the Department of Agriculture develop and implement policies and procedures to ensure compliance with applicable laws and regulations, as well as to improve transparency and accountability in its programs.

The Department of Agriculture was also encouraged to establish a system to track and evaluate the effectiveness of its programs, ensuring that taxpayer dollars were being used efficiently and effectively.

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To be eligible for catastrophic risk protection coverage, you must have one of the following policies in force: the Common Crop Insurance Policy Basic Provisions, the Area Risk Protection Insurance Basic Provisions, or other crop policies that provide catastrophic risk protection coverage.

Catastrophic risk protection coverage is not available under individual revenue plans of insurance, such as Revenue Protection and Revenue Protection with Harvest Price Exclusion. However, it is available under area revenue plans of insurance, like Area Revenue Protection or Area Revenue Protection with the Harvest Price Exclusion.

A unit for catastrophic risk protection coverage will be all insurable acreage of the insured crop in the county on the date coverage begins for the crop year, unless you are insured under the Area Risk Protection Insurance Basic Provisions. In that case, this section is not applicable.

You can have more than one unit if you have multiple crop share leases or if you rent land from one person and operate it on a share basis. For example, if you rent land from five landlords, three on a crop share basis and two on a cash basis, you would be entitled to four units.

The administrative fee for catastrophic risk protection coverage is $50 per crop per county, with a maximum cost not to exceed $200 per producer per county, or $600 per producer if farms are in several counties.

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Catastrophic crop insurance policies have specific exclusions that might impact your coverage.

The Federal Crop Insurance Corporation (FCIC) has made exceptions to allow catastrophic coverage for certain endorsements or options. These are independent coverage derived from the underlying policy, not additional coverage that adds to the policy with an extra premium charge.

In some cases, FCIC has created special endorsements to provide coverage for specific crops or uses, like the Silage Sorghum Endorsement for sorghum silage.

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A few commenters questioned whether one person can really sign the acreage report for a catastrophic risk protection policy on behalf of everyone else with an insurable interest in the insured crop without their consent.

The commenters wondered if this provision applies only to specific situations, such as partnerships, joint ventures, or when the insured entity is a tenant insuring the landlord's share on their policy.

It's not clear if this provision is meant to apply to cases where others have their own policies for the same crop and county, possibly with a different insurance provider.

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The commenters questioned how this fits with other procedures and requirements regarding being an "authorized representative" for the insured entity.

They suggested that someone might need to object in writing prior to the acreage reporting date and provide their own acreage reports if they don't want to be bound by the information in the report signed by someone else.

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FCIC has made exceptions to allow catastrophic coverage on a few endorsements or options.

These exceptions do not include any provision that adds coverage to an existing policy for which additional premium would be charged.

The Silage Sorghum Endorsement was created to provide crop insurance coverage for sorghum silage.

Grain sorghum grown for silage purposes is not eligible for insurance, but the Silage Sorghum Endorsement provides a solution.

FCIC has allowed catastrophic risk protection level of coverage for the silage sorghum.

There is no real conflict with section 11(a) because these exceptions do not add coverage to an existing policy.

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The catastrophic crop insurance policy has a specific order of priority in the event of a conflict, which is outlined in the policy. This order is crucial in determining the policyholder's position in the event of a dispute.

The policy priority has been revised to include "actuarial documents" and "Commodity Exchange Price Provisions" if applicable, after the Special Provisions. The Special Provisions are important because they provide specific benefits for each insured crop that may vary by geographic area.

An insurance provider is a private insurance company that has been approved by FCIC to provide insurance coverage to producers participating in programs authorized by the Federal Crop Insurance Act.

In Section 1, definitions are simplified by deleting duplicates and outdated terms. This means that only essential definitions remain.

The definition of "approved insurance provider" is retained, specifying a private insurance company that has been approved by FCIC to provide insurance coverage to producers participating in programs authorized by the Federal Crop Insurance Act.

FCIC agrees that the definition of "FCIC" is not needed, as it is spelled out in the opening paragraph of both the Common Crop Insurance Policy Basic Provisions and the Area Risk Protection Insurance Basic Provisions.

Only a few definitions are kept, including "approved insurance provider", "FCIC", and "zero acreage report."

The order of priority is a crucial aspect of the insurance policy. It determines the sequence in which different provisions are applied in the event of a conflict.

The Special Provisions were not removed from the order of priority, but rather, the "actuarial documents" were added to it. This change was made to include relevant information in the policy.

The actuarial documents, which are part of the policy, have been added to the order of priority following the Special Provisions. This means that in the event of a dispute, the policyholder will have the benefit of both the Special Provisions and the actuarial documents.

The policy priority has been revised to now state "(2) Special Provisions" and "(3) actuarial documents" and is renumbered accordingly.