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Wheat 3

What is Crop Insurance?

And How Does it Work?

There are two types of crop insurance that agricultural producers can purchase through private agents to protect their farming operations:

The first type is Multi-Peril Crop Insurance (which includes Whole Farm Revenue Protection Insurance). MPCI is federally supported and regulated while being sold and serviced by private-sector crop insurance companies and agents. In 2022, 1.2 million policies were sold protecting more than 130 different crops, $173 billion in crop value, and spanning 490 million acres--an area larger than Texas and California combined (

The second type is Crop-Hail Insurance. Crop-Hail policies are privatized and are not part of the Federal Crop Insurance Program. These policies are sold by private insurers to farmers and are regulated by individual state insurance departments. In 2022, Crop-Hail liability was $46 billion and premium was $1.4 billion (

What makes Federal Crop Insurance unique from other insurance products is that companies that sell Federal Crop Insurance must sell a policy to any farmer who qualifies at the premium rate set in advance by the Federal government. Crop inusrane compnaies cannot refuse to provide protection, raise the premium rates, or impose special underwriting standards on any individual producer, regardless of risk.

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