Crop Insurance

field-storm-brewingOur current crop insurance policies are more affordable and go the farthest to protect your investment than any other single area of our risk management plan. The key to making crop insurance work for your operation is to select the correct policy and coverage, thereby maximizing return on investment (premiums). At Alliance we have a wealth of experience doing insurance right, while making sure you are protected. Many times, instead of giving you the maximum coverage, we recommend a lower coverage level based on your individual situation. Our most commonly utilized crop policy is Revenue Protection (RP). This policy protects producers from losses due to yield as well as marketing and also provides a true financial net when utilized properly.

At Alliance, crop insurance is our business! We use the crop insurance program to backstop all of our agricultural based risk management strategies.

Revenue Protection

Revenue protection policy types are intended to protect producers from the two most common perils threatening the farm – yield losses due to adverse environmental conditions and revenue losses due to changing markets.

Following is an example of how a revenue policy would pay:

harvest-farm-grainProjected Harvest Estimates 

  • Corn yield history of 150 bu/ac
  • Projected commodity price of $6.00
  • 80% insurance level
  • 150 x 75% = 112.5 bu/ac guarantee x $6.00 = $675.00 Revenue Trigger Value

Scenario #1

  • Producer harvests 50 bu/ac in fall
  • Harvest commodity prices of $5.50
  • Revenue Trigger $675.00 – $275.00 (50 x $5.50) = $400.00 crop insurance payment

Scenario #2

  • Producer harvests 120 bu/ac in fall
  • Harvest commodity price of $4.50
  • Revenue Trigger $675.00 – $540.00 (120 x $4.50) = $135.00 crop insurance payment even though production was above yield guarantee