Crop Insurance

There are two main types of crop yield insurance available, which come under the category of types of agricultural insurance product.

It is self-explanatory what crop insurance guards against - unforeseen problems with crops that lead to a loss of revenue: for instance destruction due to a particularly severe or early frost and so on.

The first type is multi-peril crop insurance: here one can insure against more than a single type of risk, so for instance more than one adverse weather phenomenon can be included in a single package.

This is contrasted with a single type insurance that guards against one particular problem - typically something like hail insurance.

It is also possible to take out crop insurance relating to the income that is generated by the crop, which does not relate to weather conditions. This is to do with the actual price of a crop. Because as we know, prices vary over time, so a crop revenue insurance product is one that will help to cover any decrease in price that happens to occur during the time that the crop is grown (its growing season).

Many governments around the world offer some sort of subsided insurance program for farmers, so it is well worth looking into what is available in your country. For instance it could be that they will pay a certain percentage of the premiums for an insurance product, so it is well worth looking into these. If you are with a large bank that has expertise in the agricultural market, your banking relationship manager should be able to knowledgeable in this area so do ask for their advice.

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