Revenue Protection Insurance

Safeguarding Your Farm's Income Against Market Fluctuations

Farming comes with inherent risks, especially when it comes to market prices and crop yields. Revenue Protection (RP) Insurance is designed to shield your farm’s income from both market price drops and yield shortfalls. Unlike traditional Yield Protection Insurance, which only covers losses due to low yields, RP Insurance offers a more comprehensive solution by also protecting against revenue losses due to declining market prices. This dual protection ensures that your farm remains financially secure, regardless of what the market or season throws your way.

Key Benefits:

1. Comprehensive Coverage: Protects against both yield shortfalls and market price declines.
2. Income Stability: Ensures a consistent revenue stream, even in volatile market conditions.
3. Customizable: Tailor your policy to match your farm’s specific revenue needs.

How Revenue Protection (RP) Insurance Works

Coverage Details

Revenue Protection Insurance is specifically designed to safeguard your farm’s income by addressing two critical risks: crop yield and market prices. Here's how it works:

• Yield Protection with a Twist: While traditional Yield Protection Insurance covers you when your crop yields fall below a certain threshold, RP Insurance goes further. It not only compensates for yield losses but also takes into account market price fluctuations. This ensures that even if your crop yield is within normal ranges, a drop in market prices won't leave you financially vulnerable.
• Market Price Protection: RP Insurance provides compensation if the market price for your insured crops drops between the time of planting and harvest. This feature is crucial in ensuring that your farm’s revenue remains stable, regardless of market volatility.
• Revenue Guarantee Calculation: Your revenue guarantee under RP Insurance is calculated by multiplying your expected yield by the greater of either the projected or the harvest market price. This approach ensures that you’re protected in scenarios where both yield and market prices are unfavorable.

How it’s Different from Yield Protection

The key difference between Revenue Protection and Yield Protection Insurance lies in the scope of coverage. Yield Protection focuses solely on yield losses—compensating you if your actual harvest falls short of your historical average. Revenue Protection, on the other hand, encompasses both yield and market price risks, providing a more robust safety net. If you’re concerned about market fluctuations impacting your revenue as much as—or more than—yield variability, RP Insurance is the more comprehensive choice.

Eligibility Requirements

Revenue Protection Insurance is available to farmers growing insurable crops in the United States. To qualify, you must enroll before the sales closing date for your specific crop and region. Accurate record-keeping of your farm’s historical yield data is essential, as this data plays a significant role in determining your coverage and premium costs.

Optional Revenue Protection Add-Ons

To further enhance your Revenue Protection Insurance, consider these add-ons:

• Harvest Price Exclusion (HPE): If you prefer to rely solely on the projected price for revenue calculations, HPE allows you to exclude the harvest price.
• Private Products: Additional insurance products are available through private insurers, offering further revenue protection beyond the standard RP coverage.

Several factors influence the cost of Revenue Protection Insurance:

• Coverage Level: Higher coverage levels provide more extensive protection but come with increased premiums.
• Crop Type: Different crops carry different levels of risk, affecting the premium costs.
• Historical Yield Data: Your farm’s historical yields impact the premium, with higher yields typically leading to lower premiums.
• Market Volatility: The degree of market price volatility for your crop can also affect your RP insurance cost.

Tips for Managing Revenue Protection

• Understand Your Risks: Evaluate both yield and market price risks when choosing your coverage level.
• Stay Informed: Keep up with market trends and price forecasts to make the most of your RP Insurance.
• Maintain Accurate Records: Ensure your farm’s historical yield data is accurate and up to date, as this information is crucial for determining your coverage and premiums.

How Much Coverage Should You Have?

The right level of Revenue Protection Insurance depends on your farm’s revenue goals and risk exposure. Many farmers choose coverage that protects 70% to 85% of their expected revenue. Consulting with an insurance expert can help you determine the most suitable coverage level for your unique situation.

Protect Your Revenue with Loman-Ray

Revenue Protection Insurance is critical for managing the financial risks associated with farming. At Loman-Ray Insurance Group, we’re here to help you choose the right coverage to protect your farm’s income against both yield and price risks.

Ready to get started? Fill out the contact form at the top of the page or call 888-566-2679 to speak to an agent today! Existing customers can find their local office’s information here.

^{_{The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.}}