Bravera Bank

Crop Insurance Basics

Farming is not for the faint of heart. Long hours and hard work are hallmarks, as are the risks, like weather events and natural disasters. These can create dramatic swings in your farm’s income.

The state of North Dakota experienced a severe drought in 2021. According to the Risk Management Agency, losses for the state exceeded $1.5 billion dollars.

But weather isn’t the only uncertainty: crop production and prices, government regulations and global markets can also affect your farm’s ability to thrive. With your livelihood on the line, crop insurance is a way to offset economic damages that could result from these variables.

Crop insurance protects your farm against losses that occur during the crop year. Losses must be due to unavoidable issues beyond your control, like an extreme weather event. Insurance companies have also introduced protection that combines both yield and price coverage. These safeguard a crop’s loss in value due to a change in market price during the coverage period. While crop coverage is generally similar across all crops and farms, some customizations are allowed to reflect your farm’s unique risks or because of the unique nature of the crop.

The U.S. Department of Agriculture Risk Management Agency has issued many different policy types, each covering specific risks. Some examples include:

  • Actual production history (APH) policies, which insure farmers against yield losses due to natural causes like drought, excessive moisture, insects and disease
  • Dollar plan policies, which protect against declining value because of damage that results in a yield shortfall
  • Livestock policies, which insure against lowered market prices of livestock and exclude any other losses
  • Revenue protection policies, which, like APH policies, insure against yield losses due to natural occurrences and revenue losses caused by a change in the harvest price from the projected price
  • Whole-farm revenue protection (WFRP) policies, which cover everything on the farm under one policy; WFRP policies are typically used by any farm with up to $8.5 million in insured revenue

In the event of a loss, insurance payments are disbursed immediately following the loss. This could be before harvest time (in the case of prevented crop planting or replanting payments) or after the harvest (in the case of a shortfall in crop yield).

Did you know: North Dakota was the largest producer of Canola in the United States. In fact, the second largest state produces 3.2 million pounds less than our own Peace Garden State.

Be sure to reach out to your Bravera Insurance Advisor to elect your unit structure and options before sales closing on March 15th.

Questions about insurance? 

Contact one of our insurance advisors by calling 800-225-9104 or by contacting us online. You can also request a quote online. 

Bravera Insurance has locations throughout North Dakota and Montana. We are licensed in 38 states with multiple areas of expertise. 

Bravera Insurance is an equal opportunity provider. Products and services offered through Bravera Insurance are: * Not a deposit * Not FDIC insured * Not insured by any federal government agency * Not financial institution guaranteed