John Minor Crop Insurance & Real Estate
There are two types of crop insurance. First, multi-peril crop insurance is a risk management tool that producers purchase to protect against the loss of their crops due to natural disasters such as hail, drought, freezes, floods, fire, insects, disease and wildlife, or the loss of revenue due to a decline in price. Crop insurance is federally supported and regulated. In 2015, 1.2 million polices were sold protecting more than 120 different crops covering 297 million acres, an area larger than Texas and California combined.
Second, Crop-Hail policies, which are not part of the Federal Crop Insurance Program, are regulated by individual state insurance departments. Many farmers purchase Crop-Hail coverage because hail has the unique ability to completely 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.
The Federal program came to prominence following years of costly, inefficient ad hoc disaster bills as a way to speed assistance to farmers when they need it most, while reducing taxpayer risk exposure. Today, crop insurance is a critical risk management tool for farmers and ranchers.