Dollar Plans of Insurance are usually insured in dollar per acre or some other measurement applicable to the crop.
Dollar plan policies provide protection against damage due to naturally-occurring perils. Guarantees are determined based on values published on the actuarial documents (Reference Maximum Dollar Amounts), which generally represent the cost of establishing a crop. The insured may generally select a percent of the Reference Maximum Dollar Amount in the actuarial documents equal to catastrophic level of coverage (CAT) or purchase additional coverage levels.
Indemnities are triggered when the percent of loss exceeds the deductible. The deductible is determined based on the insured’s selected coverage level.
There are 4 types of dollar plans: tree-based dollar, dollar, fixed dollar, and yield-based dollar.
- Tree-based dollar plans, i.e. macadamia tree, are not required/fixed to a contract
- Dollar plans, i.e. tomatoes, are not required/fixed to a contract
- Fixed dollar plans, i.e. chile peppers, are fixed to a contract but does not have a yield component
- Yield-based dollar plans, i.e. hybrid crop plans, are required/fixed to a contract but have a yield component