Crop / Farm Insurance

corn stalks at tasseling stageFarm insurance is a must for all agricultural producers, including farmers, ranchers and livestock companies as a protection against possible losses. Without it, these agricultural producers will have difficulties in the resumption of their normal operations after losses brought by natural disasters, steep declines in market prices, and even manmade events.

Differentiation of Insurance

It must be emphasized that there are two types of farm insurance:

Crop Insurance

Crop insurance refers to insurance plans for plant crops including wheat, corn and oats as well as fruits and vegetables.

Livestock Insurance

Livestock insurance refers to insurance policies for animals including cattle, pigs and poultry.

The terms and conditions for each type of insurance will differ because of the distinct risks for plants and animals. Interested individuals should discuss the provisions of the insurance contract to ensure that, indeed, these are favorable for their operations. Insurance experts can offer valuable assistance in this matter.

Two Types of Insurance for Crops

Crop-Yield Insurance

Crop-yield insurance refers to the coverage for losses due to natural events like hail (crop-hail insurance) and floods or drought (multi-peril insurance).

Crop-Revenue Insurance

Crop-revenue insurance refers to the coverage for losses due to deviations in expected income. The insurance company usually provides for a single guarantee for a fixed amount although cases vary widely.

Factors for Possible Losses

Farmers, ranchers and other agricultural producers are exposed to the risks of losses via two main factors:

Natural Disasters

These events usually lead to partial or complete loss of crops from the adverse impact of natural disasters like floods, hail and drought.

Declines in Prices

The agricultural market can suffer from steep declines in market prices of its commodities, thus, resulting in the loss of revenues for its producers.

These factors are covered by livestock and crop insurance policies although the exact coverage (i.e., types and amounts) will differ between policies and companies. The best piece of advice for agricultural producers is to secure farm insurance policies with comprehensive coverage at reasonable premiums especially when their centers of operation are in high-risk areas. Keep in mind that natural disasters and declines in prices are unpredictable so the more comprehensive the insurance coverage, the better off the company and its operations.

When looking for the best farm insurance policies, choose a company with the endorsement of whatever industry you are a member of. Not only will you be able to rely on the insurance company's knowledge and dependability, but you can also enjoy member benefits like discounts.

We are endorsed by the IL Pork Producer Association and the Illinois National Farmers Union, allowing discounts to policies for their members. Are you a Member?


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