What Is Covered by Crop Hail Insurance?

Crop hail insurance provides a specialized form of protection for agricultural producers, safeguarding their financial investment in crops against hailstorms. This private insurance product is designed to mitigate losses that can occur rapidly and severely. It specifically addresses damage to crops while they are still in the field, before harvest. This coverage helps farmers maintain financial stability by compensating for the value of products lost due to hail, which can devastate portions of a field while leaving others untouched.

Primary Coverage for Hail Damage

Standard crop hail insurance policies primarily focus on direct physical damage to crops caused by hail. This coverage is provided on an acre-by-acre basis, allowing for payments even if only a segment of a field is affected by a hailstorm. When hail strikes, the damage is assessed as a percentage of the potential yield that would have been achieved without the loss event. This assessment considers various forms of physical damage, such as reduced yield due to plant destruction or physical injury to the plants themselves.

The evaluation of hail damage involves an adjuster examining the crop, sometimes deferring the final appraisal until closer to harvest when the full extent of the damage is more apparent. The indemnity payment is then calculated based on the percentage of loss, minus any applicable deductible, multiplied by the dollar value of coverage selected per acre. Some policies may feature a “disappearing deductible,” where the deductible portion decreases as the percentage of crop loss increases, potentially leading to the entire loss being covered.

Additional Perils and Endorsements

While hail is the primary peril, crop hail policies can be expanded to include coverage for other named perils through endorsements or optional add-ons. These additional coverages provide broader protection for a farmer’s investment. Fire damage, for example, is a common addition, covering losses from both natural fires and those resulting from equipment malfunctions. Lightning is another peril frequently included, offering protection against direct damage to crops caused by lightning strikes.

Transit coverage is an important endorsement, insuring harvested crops against damage or loss while they are being transported from the field to their initial storage location. Some policies may also offer protection against specific types of wind damage, such as “green snap” (stalk breakage due to high winds) or lodging, which can significantly impact corn and other crops. Other optional perils that can be added include vandalism, malicious mischief, and even coverage for replanting costs if initial plantings are damaged by covered events other than hail.

Covered Crop Stages and Types

Crop hail insurance is available for a diverse range of agricultural products, extending beyond common row crops to include specialty crops. Corn, soybeans, wheat, and cotton are frequently covered, but policies can also protect forage, fruits, and vegetables. Coverage applies during specific developmental stages of the crop, generally from the point of emergence until maturity or harvest. The value of the crop, and consequently the coverage amount, can increase as the crop develops and progresses through its growth cycle.

Farmers select a dollar amount of coverage per acre, which can be adjusted during the growing season to reflect increasing crop value. While policies can be purchased at various times during the growing season, coverage usually begins after a waiting period, typically around two hours, from the time the application is signed. Coverage generally terminates by a specific date, such as December 31, or when the crop is harvested, whichever comes first.

Common Exclusions from Coverage

Crop hail insurance policies, even with additional endorsements, contain specific exclusions outlining scenarios or types of damage that are not covered. Damage occurring prior to the policy’s effective date or pre-existing damage to the crop is excluded. Losses resulting from poor farming practices, such as improper application of pest or disease control measures, are also not covered.

Damage caused by non-weather-related issues, including insect infestations or plant diseases, falls outside the scope of a standard crop hail policy. While some endorsements might offer limited coverage for certain water-related events, drought or general flood damage is not covered under crop hail insurance. Losses related to market fluctuations, low commodity prices, or delayed maturity are excluded, as these policies focus on physical damage from specific perils rather than overall yield or revenue protection.