Why a Crop Insurance Broker Is an Essential Partner for Agricultural Producers

Farming is not for the faint of heart. For all the sophisticated metrics, technological advances and scientific knowledge assisting the modern farmer, myriad uncontrollable challenges remain, among them: inconsistent and increasingly extreme weather, disease, international events such as the COVID-19 pandemic and Russia’s invasion of Ukraine, and harvest season variations from region to region that can affect prices and profitability. 

In such a volatile environment, a thorough, customized program of risk management and property and casualty insurance ― including Crop Insurance ― is essential. And for that, farmers, ranchers and other growers need to work with a certified Crop Insurance broker.

What Crop Insurance does

Crop Insurance protects agricultural producers against the loss of crops due to natural disaster or loss of revenue due to declines in prices of the commodities they produce.

Types of Crop Insurance include:

• Multiple-Peril Crop Insurance (MPCI): Federally subsidized coverage against disease, natural disaster and changes in commodity prices.
• Whole-Farm Revenue Protection (WFRP): The U.S. Department of Agriculture (USDA) describes this as insurance that “provides a risk management safety net for all commodities on the farm under one insurance policy and is available in all counties nationwide.” It is customized for any farm with up to $17 million in insured revenue and covers livestock as well as crops.
• Crop-Hail: Private insurance that covers agricultural products destroyed or damaged by hail and fire, and may also cover losses due to wind, lightning and vandalism. Sold on an acre-by-acre basis, Crop-Hail Insurance reimburses the farmer for the value of the products lost while in the field.
• Pasture, Rangeland and Forage (PRF): Another USDA program, PRF “uses a rainfall index to determine precipitation for coverage purposes and does not measure production or loss of products themselves.” In an article titled “Crop Insurance Smooths Income Fluctuations for Ranchers and Forage Farmers,” the U.S. Climate Resilience Toolkit reports, “Raising livestock on grasses or hay depends on receiving the right amount of rain at the right time of year. When a growing season is dry, Crop Insurance can make the difference between ranchers’ financial success and failure.”
• Livestock, also known as Livestock Risk Protection (LRP) Insurance: Another coverage under the federal Crop Insurance program, LRP is a price-insurance policy that helps manage the risk of price decline for feeder cattle and swine.
• Agriculture, also known as Agribusiness Insurance: While agriculture technology, or AgTech, is a boon to farmers, it also introduces new risks. As Travelers explains in this video, technology ― including robots, drones and thermal imaging ― is subject to failure, and analysis of data is sometimes incorrect. Your insurance program should include protection against these risks, along with such standard business insurance coverages as Auto, Farm Liability, General Liability, Personal Liability, Property and Umbrella/Excess.

How Crop Insurance differs from other P&C coverages

Because the level of risk is so high for agricultural producers, with losses tending to be geographically targeted and frequently catastrophic in nature, the USDA works in public-private partnership with insurance providers, mitigating the cost to farmers and ranchers for this necessarily expensive coverage. 

Crop Insurance is available only from private insurance agents who are licensed by their respective state or states after completing federally mandated training and passing a licensing exam. As explained by the USDA, “Your crop insurance agent is the link between you and the biggest single part of the federal safety net for agriculture.” 

Producers helping producers

No one knows agricultural production better than an agricultural producer, but not all agricultural producers are experts on insurance. When you work with an insurance agent or broker who’s also a farmer or rancher or vintner, you get the best of both worlds. 

An insurance professional who farms has first-hand experience with the challenges you face and therefore can provide not only the technical expertise necessary to write Crop Insurance coverage but also a deep understanding of what it’s like to experience crop-threatening rains, devastating hail, scorching drought, labor issues, equipment breakdown and more. 

Moreover, a well-informed farmer/agent will help you plan for what’s ahead, be it new technological advancement, changes in Crop Insurance to support sustainable farming or some other development that could directly affect your business. 

Farming can be a deeply rewarding business; most who enter it do so not only for a source of income but also to serve their community. But it’s a demanding, risk-filled endeavor. Having an empathetic partner who can help you manage risk and provide you with essential coverage including Crop Insurance is an invaluable advantage.

CONTACT AN ALERA GROUP CROP INSURANCE EXPERT

About the author

Maxwell Copello  
West Region Crop Specialist
Alera Group 

A third-generation farmer, licensed Crop Insurance broker and former Dartmouth College football lineman, Max Copello has a deep knowledge of the agricultural industry, a specialty in financially protecting farmers’ crops and a strong appreciation of the value of teamwork. Based in California, he works in partnership with farmers of all kinds to provide customized insurance and risk management programs through Alera Group. In addition to operating Copello Farms/Copello and Son, Max is the owner of a Montana-based real estate investment and holding company and chairman of the California Cherry Board’s Varietal Advisory Committee. He previously spent seven years as Director of Agricultural Production and Grower Relations for Prima Frutta and A. Sambado and Son, growers and packagers of internationally distributed fruit and nuts.

Contact information:

• maxwell.copello@aleragroup.com
• Connect with Max on LinkedIn