Field work is happening, planters are getting pulled out of the sheds, and pivots are getting serviced in preparation for another growing season. The last thing on the mind of a farmer is hail insurance, but it may be one of the most important things to have set up before the growing season begins.
While MPCI coverage provides a large amount of dollars of coverage, it does not protect the “top” portion of the crop. MPCI policies in the irrigated region of central Nebraska are generally covering 65-80% of a producers APH, but what about the top 20-30% that is left uncovered by the MPCI? This is where hail / wind coverage comes into play.
Hail and wind are the biggest risk of loss that we see in south central Nebraska. With good irrigation drought does not affect this area the same as it does other regions of the state, so we turn to hail and wind coverage to provide the additional dollars of coverage needed to cover the value of the crop. With the spring base price of corn this year set at $4.66/bu, down $1.25/bu from last year, producers are not getting the same dollars of coverage off the MPCI that they were getting in the past. On an irrigated field with a 250 APH at a 70% MPCI coverage level, each acre is only covered for $815, but the value of that crop is $1,165/acre. That leaves approximately $350 of unprotected value on every acre of corn in the field. This is the starting point for determining hail and wind coverage.
Unlike MPCI, where premiums are set by the RMA, hail and wind premiums are unique and can have a large variance depending on each company, policy, and township / range that the fields are located in. In 2024, hail and wind rates have seen a larger than normal increase in premium over the previous year. This is due to the increased liability the companies see for damage caused by wind and hail. Because of this, many producers are switching policy types or in some cases even different companies. Some policy types such as Hail Production Plans (HPP) have an increased rate of nearly 40% over 2023 in some areas. This is cause of concern for many producers that have been on hail production plans in the past.
The agents at ASA are well educated on the types of hail and wind policies available in the marketplace and we do our best to advise producers on the hail and wind coverage to fit their needs, without breaking the bank. If you are concerned about increased hail and wind rates, contact an ASA agent for a free evaluation on your current coverage. We will walk you through our seamless ‘Crop Coverage Portfolio’ process. If we believe a change is needed, we will give you a summary of the policy we would recommend for your operation and will handle the facilitation of that policy if needed.
ASA Crop Insurance is an agricultural insurance agency specializing in ag insurance. That’s all we do. Our agency is here to assist and answer questions regarding all things agricultural insurance. We look forward to the opportunity to discuss your ag insurance needs with you.