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Crop Insurance Pointers for 2020

Take some risk off the table in 2020 by being proactive with your crop insurance decisions.  Follow these steps to provide peace of mind and profit protection. 

1. Consider supplemental coverage.

If you are enrolling in Price Loss Coverage (PLC) this year, you can purchase the supplemental coverage option (SCO). You are ineligible if enrolling in Agricultural Risk Coverage (ARC).

“This product provides coverage above a standard multi-peril crop insurance (MPCI) policy with losses triggered by the county yield instead of the individual farm yield. It can provide cost-effective protection,” says Mike Scherer, president of Ag Risk Solutions.

2. Know your risk of back-to-back prevent planting years.

“Prevented planting acres could be high again especially in the northern states,” says Jamie Wasemiller, analyst and crop insurance agent with the Gulke Group. “Buy up the prevented planting percentage as high as you can. It is inexpensive and effective. Replant insurance might also be prudent.”

3. Weigh the pros and cons of beyond-the-basic products.

Consider these various products and options:

Yield exclusion and trend adjustment can increase your guarantee with a small increase in premium, Scherer says. “A producer can often add these options, lower their coverage level, and still get more coverage for less premium.”

Alternative pricing products give you the ability to use another time frame to determine your spring price. “It can be a relatively cheap call to capture higher prices due to market issues that happen outside the normal price discovery month,” Wasemiller says. 

Several programs increase bands of coverage beyond your regular MPCI, Wasemiller says. You could increase the amount of coverage in certain coverage levels based on your historical production data. Or you could buy coverage above your regular MPCI. 

4. Schedule an appointment with your crop insurance agent. 

Give your agent extra time to determine the best options for your farm. Have your intended acres ready, as your crop mix could affect the coverage options. 

“This year we could see acres that fall out of rotation,” Wasemiller says. “Producers and their agents need to take a hard look at what that has done to yields to purchase insurance levels accordingly.”

Additionally, he says, some companies offer bundles of coverage for products such as hail insurance, if you elect coverage early.

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