Production Plan is a Crop Hail insurance endorsement that is coupled with your federally-subsidized MPCI policy, and is designed to provide coverage on the portion of your crop that is left unprotected by your MPCI policy.
Production Plan differs from traditional hail insurance in the indemnity phase. A traditional hail policy pays based on the percent of damage a crop sustains, while the Production Plan endorsement goes a step further and takes into account the total harvested production. An adjuster will still assess the percent of damage at the time of the hail loss; however, the final hail loss calculation cannot be completed until harvest when the actual production to count is known
- The crop acreage insured under this endorsement must also be insured under a Yield Protection, Revenue Protection, or Revenue Protection with Harvest Price Exclusion policy with FMH or another AIP.
- If MPCI is with another AIP, FMH will require the summary of coverage and current crop year acreage report.
- Offered on an MPCI unit basis for select crops at 110% – 120% of insured’s APH (check your state for crop and modified APH availability).
- Insured’s APH and MPCI levels are used to determine the Limit of Insurance and premium.
- An indemnity payment is based on the actual hail loss and the final production to count.
- Coverage terminates December 31.
Late and Prevented Planting
Any percentage reduction to the MPCI Production Guarantee on the MPCI policy because of late planting will apply to the Limit of Insurance on this policy. Any acreage prevented from being planted is not insurable.
If the supporting MPCI policy is written on an enterprise unit basis, this policy will compute the minimum deductible and loss payable on an enterprise unit basis. if the supporting MPCI policy is written on an enterprise unit basis, but the insured can maintain records on an optional unit basis, FMH will provide coverage on an optional unit bases.
- The insured is to provide the total harvested an/or appraised production for each nit no later than the earliest of 30 days after harvest or 30 days after termination of coverage.
- FMH cannot pay any loss until the entire insured crop in the unit sustaining direct damage has been harvested or appraised.
- Harvested and/or appraised production will be determined using the same procedures used to establish production to count under the underlying MPCI policy.
The Price Election is the MPCI Projected Price on the underlying MPCI policy
Price Election Percent
The insured may select a percentage of the Price Election between 25% and 100%.
Production Plan Coverage Level
The insured may select levels of 110%, 115%, 120% of the approved APH yield. Check your state for levels available.
Production Plan Guarantee
(APH) x (Production Plan Coverage Level) x (Acres per Unit)
MPCI Production Guarantee
(APH) x (MPCI Coverage Level) x (Acres per Unit)
Crop Hail Production Guarantee
(Production Plan Guarantee) - (MPCI Production Guarantee)
Production Plan Loss
(Production Plan Guarantee) - (Production to Count)
Production Loss Due to Hail
(Production Plan Guarantee) - (Percent of Hail Loss)
Lesser of (1) Crop Hail Production Guarantee, (2) Production Plan Loss, or (3) Production Loss Due to Hail, multiplied by the Price Election and your Share.
Limit of Insurance
(Crop Hail Production Guarantee) x (Price Election) x (Share)
The Production Crop Hail Plan is ideal for a producer who:
- Looks at exposure on an aggregated basis as indemnity is paid on a UNIT basis, not an acre-by-acre basis.
- Understands that a crop that has sustained a hail loss can recover through a growing season and in some cases, may harvest over its actual production history.
- Is comfortable waiting until final unit production is determined prior to calculation and payment of any indemnity.
* May require to subtract deductible bushels from bushels lost and multiply times an increasing payment factor if production plan contains a deductible.
** All calculations are for example purposes only.