RMA provides policies for more than 100 crops. (This number would be much higher if every crop variety insured in every county were counted.) RMA is also currently conducting studies to determine the feasibility of insuring many other crops and is conducting pilot programs for some new crop policies in selected states and counties. Federal crop insurance policies typically consist of:
Types of Coverage
- The Common Crop Insurance Policy;
- The specific crop provisions; and
- The policy endorsements and special provisions.
Farmers may select from various types of policies. Standard Multiple Peril Crop Insurance (MPCI) policies are available for most insured crops. Other plans may not be available for some insured crops in some areas. In addition, some of the policies listed below are not available nationwide; they are being tested in pilot programs and are only available in selected states and counties.
Multiple Peril Crop Insurance (MPCI)
MPCI policies must be purchased prior to planting and cover loss of crop yields from all types of natural causes including drought, excessive moisture, freeze, and disease. Newer coverage options combine yield protection and price protection to guard farmers against potential loss in revenue, whether due to low yields or changes in market price.
Under the Federal Crop Insurance Program’s unique public-private partnership, there are currently 15 private companies authorized by the United States Department of Agriculture Risk Management Agency (USDA RMA) to write MPCI policies. The service delivery side of the program—writing and reinsuring the policies, marketing, adjusting and processing claims, training and record-keeping, etc.—is handled by each private company. The program is overseen and regulated by the Risk Management Agency (RMA). The RMA sets the rates that can be charged and determines which crops can be insured in different parts of the country. The private companies are obligated to sell insurance to every eligible farmer who requests it and retains a large portion of the risk on over 80 percent of the policies written.
The federal government also subsidizes the farmer-paid premiums to reduce the cost to farmers. In addition, it provides reimbursement to the private insurance companies to offset operating and administrative costs that would otherwise be paid by farmers as part of their premium. Through this federal support, crop insurance remains affordable to a majority of America’s farmers and ranchers.
By combining the regulatory authority and financial support of the federal government with the efficiencies of the private sector, the crop insurance program has succeeded in meeting and even surpassing the goals set forth by Congress for broad participation, diversity, and inclusion. By using the private sector, risk is shared among the private companies as well as the government.
We Also Offer Crop Hail Insurance.
Crop Hail policies are not part of the Federal Crop Insurance Program and are provided directly to farmers by private insurers. Many farmers purchase Crop Hail coverage because hail has the unique ability to totally destroy a significant part of a planted field while leaving the rest undamaged. In areas of the country where hail is a frequent event, farmers often purchase a Crop Hail policy to protect high-yielding crops. Unlike MPCI, a Crop Hail policy can be purchased at any time during the growing season.
For more information on the crops we offer insurance on, visit the RMA website