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How to Save Money on Crop Insurance

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How to Save Money on Crop Insurance

As the deadline for crop insurance nears, many farmers miss critical details that may cost them dollars. With the crop insurance deadline just days away, farmers are having to make critical decisions on their coverage. Jason Alexander, with Farm Credit Mid-America, says crop insurance is a lot more complicated than it used to be and just doing the same old things does not work, “A lot of farmers made crop insurance plans back in 2011 and, from then on, have just kept rolling the same coverage forward. You just cannot afford to do that today.”  He added there are just too many new changes and policy options to consider.

For example, research shows that upwards of 40% of growers miss taking advantage of the yield exclusion option. Alexander says this is something that can save big dollars and improve coverage, “In most cases, yield exclusion is something that should be considered. It can allow you to throw out a low yielding year which will up your ABH. This, in turn, can allow you to cover your level of coverage.”  According to USDA YE allows a producer to exclude an actual yield(s) from an eligible crop year for the county (such as a year in which a natural disaster or other extreme weather event occurs) from their production history when calculating approved APH yields used to establish their crop insurance coverage. The level of insurance coverage available to a producer is based on the producer’s average yields over the four to ten most recent crop years, and excluding lower yielding eligible crop years can increase the producer’s approved APH yield.

Alexander says reviewing the current structure of your operation with your crop insurance agent is critical, “This is one of the areas where most of the problem occur.” He says a review of an operation will reveal old data about the farm that is still on file.

The deadline for purchasing crop insurance is March 15. Farm Credit of Mid-America has a variety of online tools to help at e-farmcredit.com.