Crop insurance or crap insurance

[Ache4Acres]

Our family has farmed for essentially 40 years and never been in crop insurance.

After the past couple years and putting down the groceries unlike ever before, we are now considering it. The investment is just too much to run naked.

Is it a real insurance product or just a tax on all the good farmers that end up supporting all the other guys out there farming the system?

[freewheat]

IMO, it would be hard to "farm the system". If you build good yields, you get up to 80% coverage.

[freewheat]

And for the record, I do not think there are very many "bad" farmers out there. I have gotten too wet to seed coverage a few times. Has nothing to do with being a bad farmer.

[Klause]

with CAP you get up to 90% coverage....

[seabass]

Worst part for u is that u will have to go with your area average. Takes years to build up your own average yields to give u better coverage.

[farmaholic]

I thought you could build your individual averages if you could provide the info from good verifiable sources. Ag-Stab and seeded acre
records. Anyone ever do it?

I think big claims free experience discounts keep people in it.

Long time insurers must have to use area averages when they grow a crop they've never grown before.

I thought Production Insurance or Ag Stab was needed for cash advances.
Lenders likely require it for big borrowers. Input Capital(canola streamers) likely require it. What about FCC's input credit.

We managed to survive without it. We never thought the "guarantees" were good enough at entry level. Our history shows claiming would have been tough and barely in claim positions at times.

"It isn't meant to fully dress you...just cover your ass". LOL

We're not in it so I guess we are kinda running naked.

[freewheat]

Yeah, if you are just going to jump into it, it is tougher. They use "area average" yields. In plain english, they use some kind of yields from 1930's Kazakhstan. If you have been in it, and you grow a new crop, I believe they compare your other crop yields, vs. a benchmark for your area, and adjust yields accordingly.

I never thot about the fact that jumping in, you would have high premiums, ( no experience discount) plus you would have to build a yield history on your own.

I would call my local office for better details, and how it may work in your case.

[JDGreen]

If your worried about the risk of the groceries your buying. Crap insurance is just that. CRAP.. There are better coverage programs out there that protect your investment in inputs plus a set guaranteed revenue above those inputs that you choose. If you haven't ever been in CRAP insurance like others said pretty much bugger for coverage and the experience discount is a bloody joke.

[AlbertaFarmer5]

I've never carried crop insurance either, I have a baler and cows that I consider to be my insurance. My reason being is that the average yeilds for my area are so pitifully low that in my worst disaster( and I've had plenty) I couldn't get below their yeild, let alone 80% or less. And I don't like the idea of paying into it for 5 years just to get an average. Might as well invest that money in improving the land so I don't have disasters. But my bank keeps insisting. And I keep ignoring them until oops its too late, maybe next year. Last year I finally humoured them and took out Hail insurance with the Lack of moisture option on a few acres. And after a record dry winter, spring and most of the summer, they found that we had above average moisture, so no payout. And to add insult to injury, I had a few acres (less than a percent) of canola that I was never able to combine last fall. Moose and deer completely destroyed it, I called to make a claim, big surprise, no wildlife insurance on crops left out this winter.

For perspective, in 2014 with no insurance after 90 to 100% hail(nieghbors in all directions adjusted to this) in mid July on all acres, then killing frost and snow on the regrowth in early September. The yields I still ended up with were above the 80% trigger. But may have been a claim for quality. But was worth more in a bale than in a bin. I can't figure out who is growing crops around here with those types of average yeilds and remaining in business?

That said, I also put minimum insurance on automobiles, and none on equipment, homes and buildings etc. My logic is that if a disaster won't break me, then I'm better off investing in the farm, than in insurance.

[Ache4Acres]

Are you able to go online and check coverage based on average yield in the RM?

Doesn't sounds great so far, for someone just getting in for first time