Income Protection Coverage - IP
GENERAL SUMMARY
What is it? What are its Benefits?
This program provides comprehensive protection by establishing a dollar guarantee based on 100% of the exchange early futures price (projected price). Coverage levels are available from 50-75% (80 and 85% levels available in limited areas) of the Actual Production History (APH) and 100% of the price. For land designated as high risk, catastrophic (CAT) coverage is available at 27.5% of the APH and 100% of the price. The perils covered are weather related causes of loss, low price, and certain other unavoidable perils. Income Protection Coverage provides prevented planting and replanting protection where available.
Dollar Guarantee
The dollar guarantee for the insurance unit is the historical yield (APH) times the projected price, times level of coverage, times insured acreage, times ownership share. Growers have the flexibility to vary the dollar protection from 50/100 to 75/100 (up to 85/100 in limited areas).
Value of Production
The value of production to count is the harvested production, plus any appraisals, multiplied by the harvest price as defined by the policy provisions. The price at which the crop is sold does not affect the amount of indemnity.
Loss Payment
To calculate a payable loss, subtract the value of production (bushels times the defined harvest price) from the dollar guarantee, and multiply by the ownership share.
Units
Unit divisions are limited to an enterprise basis. Enterprise units consist of all insurable acreage of the insured crop in the county, regardless of interest or persons sharing.
How It Works (wheat illustration)
Benefits of IP
1. Loss payments more closely track with economic results of the crop.
