Ag Insurance Policies

Frequently Asked Questions on Agricultural Insurance

How Does Ag Insurance Work?

Crop insurance is purchased by agricultural producers, including farmers, ranchers, and others to protect themselves against the unknown.

A loss can happen to their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities.

What Is Coverage Like for Crop Insurance?

The two general categories of crop insurance are called crop-yield insurance and crop-revenue insurance.

Crop-yield insurance consists of two main classes:

• Crop-hail insurance is available from private insurers because hail is a narrow peril that occurs in a limited place and its accumulated losses tend not to overwhelm the capital reserves of private insurers.
• Multi-peril crop insurance covers the broad perils of drought, flood, insects, disease, etc., which may affect many insureds at the same time and present the insurer with excessive losses.

Why Do Premiums for Insuring Crops and Farming Vary?

Crop-revenue insurance is a combination of crop-yield insurance and price insurance. Crop-revenue insurance covers the decline in price that occurs during the crop's growing season.

A farmer or grower may desire to grow a crop associated with a particular defined attribute that potentially qualifies for a premium over similar commodity crops, agricultural products, or derivatives thereof.

The particular attribute may be associated with the genetic composition of the crop, certain management practices of the grower, or both. However, many standard crop insurance policies do not differentiate between commodity crops and crops associated with particular attributes. Accordingly, farmers have a need for crop insurance to cover the risk of growing crops associated with particular attributes.

Get an Ag Insurance Quote from Koch Insurance

To see how our ag insurance policies can help you feel secure, please contact us for a free quote. Koch Insurance agencies are located throughout South Dakota, with office locations in Tea, Tyndall, Tabor, Springfield, and Yankton. We'll provide you with all the information you need to make an informed decision on your farming safety.