May 9, 2023

Business Tips and Tools

Crop-Hail Coverage: Providing Peace of Mind in the Middle of the Storm

By: Farm Credit East Knowledge Exchange


The Northeast U.S. is no stranger to severe weather events that can cause significant damage to crops. Hail, specifically, can be a true catastrophe for agricultural businesses — and they’re unpredictable. The damage caused by hailstones can destroy a portion of a crop and result in significant financial losses for farmers. Crop-hail insurance is an essential tool for managing this risk.

A crop-hail insurance policy provides coverage for reduced quality and production of crops resulting from hail events. This coverage gives acre-by-acre protection that can cover up to the full value of the crop, and the cost of a crop-hail policy may be less than the deductible of a Multi-Peril Crop Insurance (MPCI) policy.

Crop-hail insurance covers a multitude of fruit, vegetable and row crops, and coverage is dependent on the growth stage of the crop. For example, tree fruit coverage goes into effect when 90% of the crop has grown to a half inch in diameter; berries need to be clearly visible and formed; and grape coverage is effective when 75% of the crop has grown to at least an eighth inch in size. Additionally, damage must exceed either 5% or 10% of the crop, depending on crop and the insurance company that issues the policy.

Coverage is based on a dollar amount per acre rather than production history, which is the same as with MPCI policies. Unlike regular MPCI crop insurance, crop-hail insurance does not require the farmer to prove a yield loss. The policy pays out based on the severity of the damage caused by the hailstorm, regardless of whether the crop is ultimately harvested or not.

Crop-hail insurance premiums vary depending on location, coverage levels and insurance company. They are generally lower than those for traditional crop insurance policies, making it a cost-effective way for farmers to manage risk. In addition, crop-hail insurance policies typically adjust and pay out quickly after a loss, providing farmers with the cash they need to replant or cover their operating expenses. There is not a specific deadline to obtain a policy.

Crop-hail insurance coverage is an essential tool for Northeast farmers to manage risk and protect their crops against the financial impact of hail damage. With a range of coverage options, low premiums, and fast adjusting and payouts, crop-hail insurance provides farmers with the peace of mind they need to focus on their business without worrying about the impact of severe weather.

Contributed by: John Fitzpatrick, Crop Growers

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Tags: crop insurance, apple, fruit, risk management

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