Weathering the Storm with Crop-Hail Insurance

The rich Midwest farmland is a wellspring of agricultural bounty. But even with its fertile lands and vast agricultural expanse, the area faces the constant threat of nature’s fury. Natural disasters like hailstorms, winds, and fires pose unprecedented risks to farmers as they often obliterate entire harvests, jeopardizing livelihoods and food security.

Statistics from the University of Nebraska-Lincoln’s CropWatch program reveal that hailstorms alone affect 70% of Nebraska annually, and they caused an alarming $1 billion in economic losses in 2022. These numbers are echoed throughout the region, highlighting the need for comprehensive risk management strategies for farmers. That’s where crop insurance becomes a worthwhile investment.

What is Crop Insurance, How Does It Work, and Who Needs It?

Crop insurance acts as a financial safety net for farmers to protect them against losses brought about by natural disasters. It guarantees a minimum yield or revenue for a specific crop based on historical production data and market prices. Farmers pay premiums throughout the growing season. If their yield falls below the insured level due to covered perils like hail, wind, fire, or drought, they receive a payout to help offset their losses.

If you are an agriculturalist who relies on the unpredictable income of farming, you need crop insurance. It provides peace of mind that allows you to focus on crop management without the constant fear of financial ruin due to unforeseen circumstances.

What is Covered Under Crop Insurance, and What is Not?

These policies typically cover a range of threats that can devastate crops, including hail, wind, fire, excessive rain, drought, and insect infestation. However, not all losses are covered. For example, market price fluctuations and losses due to preventable factors like poor farming practices are not included in standard crop insurance policies. They are risks inherent to a farmer’s business operations and management decisions rather than unforeseeable external liabilities.

Also, coverage levels and deductibles can vary depending on the policy and insurer. One crop insurance company might offer higher coverage levels and lower deductibles for hail damage, while another may provide completely different coverage terms for the same hazard. For these reasons, farmers must carefully review their policies to understand the scope of coverage.

Crop-Hail Insurance vs. Multiple-Peril Crop Insurance (MPCI)

While both provide much-needed financial protection for farmers, they have distinct characteristics. Crop-hail policies are sold by private insurers and regulated by state insurance departments, while MPCI is a component of the Federal Crop Insurance Program. In 2022, MCPI premiums totaled almost $19 billion, while private crop insurance premiums surpassed $1.4 billion, states, National Association of Insurance Commissioners (NAIC).

Multiple-peril crop insurance covers yield loss or a combination of harvest and price coverage due to various disasters, including those mentioned above. These policies must be purchased within specific deadlines and can include replanting incentives or penalties depending on the damage timeline.

On the other hand, crop-hail insurance specifically focuses on hail damage and is sold by private insurers regulated by state departments. Most, if not all, farmers supplement their MPCI coverage with a separate crop-hail policy due to the specific threat hailstorms have on regions like the Midwest. This multi-layered strategy ensures an all-inclusive protection against their crops’ unique challenges.

Choose Your Crop-Hail Insurance Wisely

At Northeast Nebraska Insurance, we’re not just risk management specialists but also partners in your agricultural success. We’ll work closely with you to understand your specific risks, review various policy options, and choose the coverage that best protects your investment. In addition to policy selection, our insurance advisors will guide you through the claims process and ensure you receive the support you deserve should a covered event occur.

Remember, 2022 saw billions in hail losses across Nebraska; don’t let a single storm wipe out your hard work. To ensure your crops are protected against whatever comes this season, contact your trusted Northeast Nebraska Insurance agent today. Trust our expertise and local knowledge of Nebraska, Iowa, and South Dakota to safeguard your livelihood.

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest