Hot topics & tips on the ever changing business of farming

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Replant coverage by policy


You must exceed the 20/20 rule for MPCI replant coverage to be granted. The rule states that the lesser of  more than 20 acres  or  20% of your unit needs to be replanted before coverage is provided. The corn indemnity payment on replanted acres equals the actual cost to replant up to a limit of 8 bushels. If the projected price of corn was $3.50, the maximum replant coverage would be $3.50 x 8 bushels = $24 per acre.

Crop Hail

Crop Hail Replant Coverage depends on the company and the type of coverage you have selected.

Some companies pay the hail loss and you decide whether to replant. The remaining insurance coverage will be transferred to the replanted crop. Additional coverage can be purchased.

Other companies have to approve replant. Then you have a choice.

Option A: Replant crop and company will pay for your actual replant costs, not to exceed 20% of the limit of insurance per acre. Remaining limit will transfer to replanted crop. If you don’t replant, your loss is paid at 20% the limit of insurance.

Option B: Pay the actual loss sustained. No coverage will be transferred to the new crop. Additional coverage can be purchased.

If you have production plan hail, you don’t have coverage for replant.

Replant Supplement Coverage

Stand alone replant coverage provides coverage on the first acre you replant. Plus, you can select up to a certain amount of coverage, potentially $50-80 per acre. The indemnity payment will be the lesser of the actual cost of replant or the coverage limit elected on the policy.


Selected Coverage per Acre: $50

Replanted Acres: 10

Actual Cost of Replant: $55

Indemnity Payment: $50 coverage limit x 10 acres = $500

You must insure all acres per crop per county. Therefore, you would need to evaluate if this coverage makes sense for your operation.







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3 things you may not know about your crop hail coverage

1. Do you know if your crop hail policy has an actual cash value clause?

An actual cash value clause states that the amount payable may not exceed the actual cash value of the portion of the crop destroyed by perils insured against. The actual cash value may be determined  by averaging the next 10 days closing market cash price at a facility where you normally sell your grain.

Most years, the actual cash value clause doesn’t affect a hail payment. However, if the weather is abnormally dry or wet, the crop hail coverage may exceed the actual cash value of the crop. Unfortunately, this situation is when the actual cash value clause may reduce a hail payment.

For example: You insured your crop to value at $800 per acre, but at claim time, a drought caused the crop to only be worth $600 per acre. The hail storm created a 30% hail loss.  On a full coverage policy, the loss calculation would use the $600 actual cash value limit rather than the $800 crop hail limit. This would result in a $180 per acre claim payment ($600 x 30%) rather than a $240 claim payment ($800 x 30%).

Check to see if an actual cash value clause is included in your crop hail policy. Continue reading