PHI Insurance Services, Inc. - Crop Insurance Products

Catastrophic Coverage or CAT is the minimum level of MPCI coverage provided by FCIC.

CAT insurance was created by Congress in 1994 to replace ad hoc disaster assistance – providing coverage for the equivalent of 27.5% of the value of the crop.

Purchasing this minimum level of coverage allows producers to qualify for emergency disaster benefits and other farm support programs administered by local Farm Service Agencies.

Farmers pay no premium, only a small administration fee per crop per county regardless of the type of crop or the number of acres.

The policy reimburses lost bushels below the 50% yield guarantee at 55% of the established price.

Written in conjunction with a Multi-Peril Crop Insurance (MPCI) policy to provide additional hail coverage. Provides protection from hail on the top ¼, ⅓ or ½ of the crop.

Covers the gap of MPCI deductible – the Companion Hail policy will pay the full value of the policy at or before the degree of loss at which the MPCI policy begins to pay.

Reimburses losses due to hail, fire and lightning and may also include coverage for other losses such as vandalism, transit, stored grain and fire department service.

Provides guarantee options in dollars/acre limited by established crop values.

Variety of coverage plans available – zero deductible, 5%, 10%, 15%.

Ability to pick and choose which crops – even which fields – to cover and combine different coverage options on the same policy.

Cash rate for early pay, available only in some areas.

If a loss occurs, the policyholder must notify the agent/company in writing within 10 days and delay harvest until the adjuster has seen it.

If damage occurs early in the season, the policy offers replant payment to cover the actual expenses not to exceed 20 percent of the liability/acre. Replant losses do not reduce the total policy liability.

Provides coverage against the same perils as MPCI with the addition of upward and downward commodity market price movement. Protects against lost revenue caused by low prices, low yields or any combination of the two.

The policy sets a minimum revenue guarantee before planting that is based on the grower's Actual Production History, the coverage level selected, the grower's share interest in the crop and a price derived from the Chicago Board of Trade (CBOT). The policy also establishes a harvest revenue guarantee based on the same factors except using the CBOT price at harvest time. The Final Revenue Guarantee is the greater of the minimum revenue guarantee or the harvest revenue guarantee. The Final Revenue Guarantee is compared with the Calculated Revenue which is determined by multiplying the actual harvest yield times the Harvest Price derived from the CBOT to determine if any indemnity is due the grower.

When harvest markets increase, so does the policy liability but at no additional premium charge.

If the grower sustains a yield loss, the CRC policy will provide revenue to replace the lost yield under most circumstances. This feature can give the grower confidence to take advantage of profitable pre-harvest pricing opportunities on the bushels guaranteed by the policy. This feature also can provide the livestock producer revenue to replace lost yield that was intended for livestock feed.

Offered by the FCIC/RMA as an alternative program for corn, soybean, wheat and forage that addresses county-wide crop failures. Producers are not required to provide or update actual yield databases.

GRP pays participants only in the event the average county yield harvested falls below the producers elected percentage of the actuarial yield. It does not indemnify producers for personal losses.

Coverage levels are in five percent increments from 70%-90%. CAT level is available for forage only at the 65% yield and 45% of maximum dollar protection.

The insured may select any whole-dollar amount of protection from 60 percent through 100 percent of the maximum protection per acre contained in the actuarial documents.

GRP works well for those farmers who farm most of the county or whose yields track above the county and have never suffered catastrophic losses when the most others did.

Like GRP but utilizes a market based price or expected price.

Coverage levels can be selected between 70%-90% in 5% increments.

Based on county yields and losses – not individual performance.

Pays when the actual county revenue per acre falls below the insured’s elected revenue guarantee.

A revenue product that protects against reductions in gross income when yields or prices fall.

Revenue guarantee is set prior to planting and does not move.

Indemnities are paid when actual revenue raised falls below the revenue guarantee. If fall market prices increase, revenue guarantee does not move and indemnities are less likely.

Utilizes Enterprise Units only.

Continuous Coverage. Shares MPCI reporting requirements and reporting deadlines.

A federally regulated and subsidized yield guarantee program that covers losses due to adverse weather, insects, wildlife, diseases, replanting, prevented planting, poor quality and even earthquakes and volcanic eruption.

Qualifying claims reimburse lost bushels (below the established bushel per acre guarantee) at an elected price per bushel.

Bushel guarantees are determined from a straight average of a minimum of four building to a maximum of ten years of actual production history. Approved yield histories permanently attach to the legal descriptions and the social security number of those with ownership of the crop.

Coverage rates, factors and reporting deadlines are written on a county basis. Coverage can be tailored by choosing options such as level, price, unit structure and prevented planting benefits.

RA provides coverage against the same perils as MPCI with the addition of downward price movement and the option to purchase additional protection for upward price movement.

RA offers coverage levels of 65% to 85%. For basic and optional units 80% and 85% are only on crops and in counties where MPCI allows 80 or 85%.

Uses the producer's own Actual Production History (APH) to establish guarantees on a unit basis. Prices are established in the same manner as CRC.

Four types of units available – optional, basic, enterprise and whole farm.