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What is Crop Insurance?
Crop Insurance is a federally supported risk management program that helps agricultural producers protect against financial losses caused by natural hazards and market fluctuations. Today, the federal crop insurance program serves producers in all 50 states, offering protection for diverse farming operations nationwide. But what goes into the risk management program, and how does it work? Feel free to use the quick links below to navigate directly to specific topics.
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How Did Crop Insurance Get Started?
Federal crop insurance was first started in the 1930s (though there were some private insurance companies offering crop insurance policies as far back as 1880!) alongside some additional initiatives to assist in helping the agriculture industry recover from a combination of the Great Depression and the Dust Bowl. The program began as an experiment, mostly working with major crops in heavy-producing areas until the Federal Crop Insurance Act was passed in 1980. In 1994, the Federal Crop Insurance Reform Act was passed. This required producers to participate in the crop insurance program to be eligible for deficiency payments under price support programs, certain loans, and a few other benefits. Due to the mandatory participation requirements, CAT coverage was created.
Congress did remove the mandatory participation requirement just two years later in 1996. Crop insurance participation was still required however, to receive any disaster benefits that might be made available for that crop year. Eventually, in 1996 the RMA was created to administer these programs, as well as non-insurance-related risk management and education programs designed to help support US agriculture.
To read more about the program’s history, check the RMA’s history page. Today, the farm bill plays a major role in determining how crop insurance functions, while also influencing many other programs tied to food, nutrition, and agricultural support. To learn more about the farm Bill, take a look at our farm bill overview, or our summary of why the farm bill matters for crop insurance.
Why is Crop Insurance Important?
Crop insurance helps protect a producer’s yields and revenues during rough years. That way, if disaster strikes and the yield is cut in half or worse, producers should be able to survive the problem year and continue producing the next year. You can view crop insurance as one of America’s strategies to ensure constant food production, even during challenging years. The American food safety net.
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So How Does Crop Insurance Work?
Crop insurance operates differently from standard property and casualty (P&C) insurance, which can sometimes lead to confusion. For example, In traditional P&C policies, a deductible represents the amount you must pay out of pocket before the insurance company begins covering a loss. With crop insurance, the concept works differently. Instead of a dollar-based deductible, the portion of production or revenue not covered by the policy effectively functions as the deductible. In other words, producers select a coverage level (such as 70%, 75%, or 80%), and the uninsured percentage represents the share of risk they retain.
While additional endorsements and coverage options can help reduce this retained risk, (for example, the SCO endorsement), they typically come with a higher premium. It is also important to understand that crop insurance does not cover personal liability, buildings, or other property-related risks. Those exposures are addressed through separate farm or property insurance policies. For more information on the differences, check out our article on the difference between farm and crop insurance.
One of the most significant distinctions between crop insurance and P&C insurance is the program’s structure. Crop insurance is federally supported, with the government playing a key role in funding, regulating, and administering the program. As a result, understanding how crop insurance works also requires a basic understanding of how the program is funded and delivered.
How is Crop Insurance Funded?
How is Crop Insurance Funded?
Crop Insurance uses the funding specified in the US Farm Bill to provide insurance programs to farmers based on several different factors, including crop type, yields, market averages, natural disasters, area averages, and more, depending on the product selected. Additionally, many federal products are partially subsidized (or, in the case of CAT insurance, fully subsidized) by the government to help keep the program affordable for producers. After the One Big Beautiful Bill in 2025, certain subsidies may reach up to 80%, depending on the product.
How is Crop Insurance Distributed?
The government then partners with private companies to manage the sale and distribution of crop insurance products nationwide through the Risk Management Agency, or RMA. These companies, known as Approved Insurance Providers, or “AIPs”, sell policies directly to farmers or work with independent agencies to support the sales process. In addition to federal products, AIPs may also develop and offer private product solutions, often with input from these smaller agencies. Unlike federal programs, private products are backed by the insurance company rather than the government. The smaller companies can then partner with multiple AIPs, providing their producers and crop insurance agents access to a broader range of coverage options.
Beyond selling and distributing insurance products, AIPs are also responsible for underwriting, policy administration, loss adjustment, and claims processing. While the overall framework for these tasks is consistent, individual AIPs may differ their systems and operational processes. AIPs often collaborate with agencies such as Silveus, whose agents work directly with producers to help evaluate coverage needs, identify appropriate risk management strategies, process the paperwork, and submit applications to the AIPs. Additionally, Silveus agents and their teams assist in starting the claims submission process with a producer’s AIP.
The Crop Insurance Cycle
Beginning the Cycle
Each crop year begins a new insurance cycle, starting with the insurance offers. The Risk Management Agency publishes actuarial documents, that outline the specific insurance plans, crops, commodity types, varieties, and practices that are available for coverage in each state and county. In addition, the actuarial documents also specify the amount of insurance, coverage options and levels, price elections, applicable premium rates, and subsidy amounts.
At this stage, producers generally have a window of a few months between these initial offers and the sales closing dates to meet with their agent, review coverage options, and build a strategy that aligns with their operation. (Graphic from the USDA RMA).
Crop Insurance Units: How A Field Is Categorized
Many crop insurance policies use units to group fields and acreage together. These unit structures are then used when determining premium costs, calculating losses, administering claims, and more. There are three primary types of crop insurance unit, Basic Units, Optional Units, and Enterprise Units.
Basic Units:
This unit type is determined by the county, crop, and shareperson. An insured automatically qualifies for BUs without exception. Lets assume farmer Jim farms two soybean fields, and two cornfields in the same county. One of the corn fields he shares with farmer Jane. When organized as basic units, Jim would have one soybean unit, and two basic corn units; one for the acreages he owns 100% and another for the acreage he shares with Jane. These unit types are often used for smaller operations that may not qualify for other unit types. For these examples, we have simplified the unit names.
Enterprise Units:
This unit type includes all insurable acres of the same insured crop in the county. Enterprise units break into separate units based on factors such as specific irrigation practice, cropping practice, or type. Enterprise units are generally cheaper because they consider all of the crop in the entire county.
As you can see in the example, there are four corn fields in county 1, and 1 corn field in county 2. Regardless, with an enterprise unit, we would have 1 corn unit comprising all four fields from county 1 (assuming they are the same type and practice.) and 1 additional corn unit from county 2 comprising of the single corn field from that county. In addition, you can see that in County B, there is a irrigated soybean field. This would count as a separate unit from the other non-irrigated soybean fields in that county.
To qualify for a enterprise unit, it must have been planted acreage that constitutes at least the lesser of 20 acres or 20 percent of the insured crop acreage in the EU.
Optional Units:
Optional units allow a county to be divided into smaller township ranges, which can then be further broken up into sections. Since optional units divide a farm into smaller geographic groupings, it is easier for one unit to trigger a loss compensation even if the rest of your farming operation performs well. The increased likelihood of a payout is why optional units carry a higher premium.
Fields that are farmed across multiple sections will be assigned to the section containing the majority of the acreage and counted within that section. In our example, there is a corn field in Section 29 that extends in section 20. As such, the corn fields from section 20 and 29 would be considered a single unit, since there is no discernible break.
To qualify for optional units, your acres must be in two or more units and sections to qualify within each share arrangement. If it does not qualify, the acreage will default to a basic unit.
Basic Units:
This unit type is determined by the county, crop, and shareperson. An insured automatically qualifies for BUs without exception. Lets assume farmer Jim farms two soybean fields, and two cornfields in the same county. One of the corn fields he shares with farmer Jane. When organized as basic units, Jim would have one soybean unit, and two basic corn units; one for the acreages he owns 100% and another for the acreage he shares with Jane. These unit types are often used for smaller operations that may not qualify for other unit types. For the below example, we have simplified the unit names.
This unit type is determined by the county, crop, and shareperson. An insured automatically qualifies for BUs without exception. Lets assume farmer Jim farms two soybean fields, and two cornfields in the same county. One of the corn fields he shares with farmer Jane. When organized as basic units, Jim would have one soybean unit, and two basic corn units; one for the acreages he owns 100% and another for the acreage he shares with Jane. These unit types are often used for smaller operations that may not qualify for other unit types. For the example on the right, we have simplified the unit names.
Enterprise Units:
This unit type includes all insurable acres of the same insured crop in the county. Enterprise units break into separate units based on factors such as specific irrigation practice, cropping practice, or type. Enterprise units are generally cheaper because they consider all of the crop in the entire county.
As you can see in the example below, there are four corn fields in county 1, and 1 corn field in county 2. Regardless, with an enterprise unit, we would have 1 corn unit comprising all four fields from county 1 (assuming they are the same type and practice.) and 1 additional corn unit from county 2 comprising of the single corn field from that county. In addition, you can see that in County B, there is a irrigated soybean field. This would count as a separate unit from the other non-irrigated soybean fields in that county.
To qualify for a enterprise unit, it must have been planted acreage that constitutes at least the lesser of 20 acres or 20 percent of the insured crop acreage in the EU.
This unit type includes all insurable acres of the same insured crop in the county. Enterprise units break into separate units based on factors such as specific irrigation practice, cropping practice, or type. Enterprise units are generally cheaper because they consider all of the crop in the entire county.
As you can see in the example on the right, there are four corn fields in county 1, and 1 corn field in county 2. Regardless, with an enterprise unit, we would have 1 corn unit comprising all four fields from county 1 (assuming they are the same type and practice.) and 1 additional corn unit from county 2 comprising of the single corn field from that county. In addition, you can see that in County B, there is a irrigated soybean field. This would count as a separate unit from the other non-irrigated soybean fields in that county.
To qualify for a enterprise unit, it must have been planted acreage that constitutes at least the lesser of 20 acres or 20 percent of the insured crop acreage in the EU.
Optional Units:
Optional units allow a county to be divided into smaller township ranges, which can then be further broken up into sections. Since optional units divide a farm into smaller geographic groupings, it is easier for one unit to trigger a loss compensation even if the rest of your farming operation performs well. The increased likelihood of a payout is why optional units carry a higher premium.
Fields that are farmed across multiple sections will be assigned to the section containing the majority of the acreage and counted within that section. In our example below, there is a corn field in Section 29 that extends in section 20. As such, the corn fields from section 20 and 29 would be considered a single unit, since there is no discernible break.
To qualify for optional units, your acres must be in two or more units and sections to qualify within each share arrangement. If it does not qualify, the acreage will default to a basic unit.
Optional units allow a county to be divided into smaller township ranges, which can then be further broken up into sections. Since optional units divide a farm into smaller geographic groupings, it is easier for one unit to trigger a loss compensation even if the rest of your farming operation performs well. The increased likelihood of a payout is why optional units carry a higher premium.
Fields that are farmed across multiple sections will be assigned to the section containing the majority of the acreage and counted within that section. In our example on the right, there is a corn field in Section 29 that extends in section 20. As such, the corn fields from section 20 and 29 would be considered a single unit, since there is no discernible break.
To qualify for optional units, your acres must be in two or more units and sections to qualify within each share arrangement. If it does not qualify, the acreage will default to a basic unit.
How Does Acreage Reporting Affect Crop Insurance?
An important part of crop insurance is reporting planted acres insurable or not, so that coverage can be verified and eligibility for insurance can be determined. Reporting accurate numbers is incredibly important for ensuring proper coverage, accurate guarantees, and correct premium calculations. Precision technology can be extremely helpful during acreage reporting time, as when properly recorded, precision data can help ensure acreage is reported with near pinpoint accuracy. Some crop insurance agencies, such as Silveus Insurance Group are capable of helping producers with this process, and are capable of integrating a producer’s accurate precision data to finish up acreage reports quickly, and precisely.
How Do Planting Dates Work?
There are also insurance options for when unexpected scenarios cause prevented planting situations. Learn more about prevent plant and replant coverage here!
Planting date timeframes vary across the country based on crop and county. For crop insurance purposes, there are three different planting dates that are important for determining how coverage applies.
- Early Plant Dates: The earliest date a crop can be planted and still qualify for crop insurance coverage. If planted prior to the earliest plant date those crops will be ineligible for replant payments
- Final plant date: The latest date a crop can be planted and still receive full crop insurance coverage.
- Late Plant: The period after the final planting date when a crop can still be planted, but the production guarantee is reduced each day planting is delayed. The late planting period generally extends 25 days after the final planting date, unless otherwise specified by the crop provisions or special provisions. The guarantee amount is reduced every day after the final plant date.
There are also insurance options for when unexpected scenarios cause prevented planting situations. Learn more about prevent plant and replant coverage here!
Planting date timeframes vary across the country based on crop and county. For crop insurance purposes, there are three different planting dates that are important for determining how coverage applies.
- Early Plant Dates: The earliest date a crop can be planted and still qualify for crop insurance coverage. If planted prior to the earliest plant date those crops will be ineligible for replant payments
- Final plant date: The latest date a crop can be planted and still receive full crop insurance coverage.
- Late Plant: The period after the final planting date when a crop can still be planted, but the production guarantee is reduced each day planting is delayed. The late planting period generally extends 25 days after the final planting date, unless otherwise specified by the crop provisions or special provisions. The guarantee amount is reduced every day after the final plant date.
How Do Crop Insurance Claims Work?
For crop insurance claims, different AIPs may use different systems to process them; however several key requirements remain consistent as dictated by the RMA. For one, a policyholder must file a notice of damage or loss for each unit within 72 hours of the initial discovery of the damage, such as after a hailstorm or other production loss. However, the notice can not be submitted later than 15 days after the end of the insurance period unless stated within the individual crop policy. The end of the insurance period varies by crop, county, and state as established by the RMA, so be sure to check with your agent if you are unaware of the timeframe for your crop and location.
Additionally, a loss adjuster must visit the field to inspect the damaged crops. After appraising the damage, the adjuster will assist the policyholder in gathering the necessary information to complete the claim and determine if any indemnity is owed.
For crop insurance claims, different AIPs may use different systems to process them; however several key requirements remain consistent as dictated by the RMA. For one, a policyholder must file a notice of damage or loss for each unit within 72 hours of the initial discovery of the damage, such as after a hailstorm or other production loss. However, the notice can not be submitted later than 15 days after the end of the insurance period unless stated within the individual crop policy. The end of the insurance period varies by crop, county, and state as established by the RMA, so be sure to check with your agent if you are unaware of the timeframe for your crop and location.
Additionally, a loss adjuster must visit the field to inspect the damaged crops. After appraising the damage, the adjuster will assist the policyholder in gathering the necessary information to complete the claim and determine if any indemnity is owed.
How Does Production Reporting Work with Crop Insurance?
Production Reporting and Crop Insurance.
Production reporting is another essential crop insurance process. Insured producers are required to report their yields, which are used to establish and maintain their APH (Actual Production History). Approved insurance providers use APH records to establish an APH database for the policyholder. The APH must contain a minimum of 4 years of production history, and may contain a maximum of 10 years. This database is used to determine a producer’s approved yield for upcoming crop years under any APH-based insurance plans. The RMA offers a number of producer elections and options designed to help improve or strengthen APH yields.
A producer’s approved yield is calculated by the RMA by averaging their APH data and factoring in producer elections, as well as RMA adjustments designed to account for yield trends, technology advancements, and other relevant factors. The final calculation results in a producer’s approved yield, which is then used to determine coverage under crop insurance plans, such as Revenue Protection (RP) or Yield Protection (YP). For a more in-depth explanation of production reporting, refer to our article on Production Reporting in Crop Insurance!
Production reporting is another essential crop insurance process. Insured producers are required to report their yields, which are used to establish and maintain their APH (Actual Production History). Approved insurance providers use APH records to establish an APH database for the policyholder. The APH must contain a minimum of 4 years of production history, and may contain a maximum of 10 years. This database is used to determine a producer’s approved yield for upcoming crop years under any APH-based insurance plans. The RMA offers a number of producer elections and options designed to help improve or strengthen APH yields.
A producer’s approved yield is calculated by the RMA by averaging their APH data and factoring in producer elections, as well as RMA adjustments designed to account for yield trends, technology advancements, and other relevant factors. The final calculation results in a producer’s approved yield, which is then used to determine coverage under crop insurance plans, such as Revenue Protection (RP) or Yield Protection (YP). For a more in-depth explanation of production reporting, refer to our article on Production Reporting in Crop Insurance!
What Crop Insurance Products are Available?
Federal Products
Federal crop insurance products, such as Yield Protection (YP), Revenue Protection (RP), Enhanced Coverage Option (ECO), and Area Risk Protection (ARP), are insurance plans and endorsements regulated by the RMA and the USDA that help protect farmers when they experience a loss. Federal crop insurance products are the foundation of most crop insurance risk management strategies, with various options and endorsements available to customize coverage.
Most federal crop insurance options include some level of government subsidy to help make coverage more affordable for farmers and ranchers. Some crop insurance products receive higher subsidies than others, and while certain products, such as CAT coverage are widely available, not every product or endorsement is offered in every county or state. Always check with your crop insurance agent to see what options are available for your operation and location.
Private Products
Private crop insurance products are offered through Approved Insurance Providers (AIPs) and are not backed or subsidized by the federal government. Instead, private products are backed and offered by AIPs. Private products can be layered onto federal crop insurance policies to provide additional coverage options for an added premium. When considering private products, working with your crop insurance agent to determine the best fit for your farm’s risk management strategy is often the most effective approach. Smaller agencies such as Silveus Insurance have an advantage because they can partner with multiple different AIPs and offer producers a wider, more competitive range of crop insurance options.
Choosing the right private product begins with understanding your farm’s risk management strategy. At Silveus Insurance Group, our agents work with multiple AIPs, and with our proprietary software, they can analyze how different products perform across various scenarios, helping tailor risk management strategies to each individual farm and ranch.
Private crop insurance products are offered through Approved Insurance Providers (AIPs) and are not backed or subsidized by the federal government. Instead, private products are backed and offered by AIPs. Private products can be layered onto federal crop insurance policies to provide additional coverage options for an added premium. When considering private products, working with your crop insurance agent to determine the best fit for your farm’s risk management strategy is often the most effective approach. Smaller agencies such as Silveus Insurance have an advantage because they can partner with multiple different AIPs and offer producers a wider, more competitive range of crop insurance options.
Choosing the right private product begins with understanding your farm’s risk management strategy. At Silveus Insurance Group, our agents work with multiple AIPs, and with our proprietary software, they can analyze how different products perform across various scenarios, helping tailor risk management strategies to each individual farm and ranch.
What Does Crop Insurance Cover?
Crops
For crops, several factors influence which insurance products are available, including the growing climates and the type of crop being produced. Crop Insurance options also often vary by state depending on growing conditions and crop type. In some cases, available options may even change across county lines. Producers growing major crops generally have more coverage options than those growing specialty or a less common crop such as persimmons. This is why it is important to speak with your Silveus Crop Insurance agent to understand the options that are available in your area, and to build the best risk management plan for your operation.
Livestock
Livestock producers also have coverage options available through the farm bill, though these programs differ from those available for row crops. The most commonly known crop insurance product for livestock producers is called Pasture, Rangeland, Forage, or PRF. This program is designed to help protect against lack of rainfall. Other products, like Livestock Risk Protection, help operations in regards to market price fluctuations. To see more crop insurance options for your livestock, stop by our rangeland and livestock coverage page.
Similar to row crops, availability can vary by region. Speaking with your Silveus Crop Insurance agent is the best way to identify the available coverage options that best fit your operation.
Crop Insurance Agents
What Do Crop Insurance Agents Do?
Crop insurance agents play a key role in helping farmers protect their operations. They provide expertise on insurance policies that manage risks such as natural disasters and market fluctuations, explain coverage options and requirements, and assist in developing risk management strategies. Agents also help producers get the claims process started with their AIP.
An agent and their team also assist producers with administrative tasks related to crop insurance, such as collecting required information, answering policy questions, and helping with policy renewals and updates.
How to Find an Agent
To connect with one of our agents about crop insurance for your operations, fill out the contact form to the right. You can also browse our agent page to learn more about our team of crop insurance agents. If you find an agent you’d like to work with, you can reach out to them directly using their contact information listed on their profile.
The RMA also offers a list of agents through their Agent Locator app. This app allows users to search for agents by location, crop specialty or name. Although it is a helpful starting point, the app generally provides very limited information, typically including contact details and any self-reported specialties.
Contact Us to Connect With an Agent!
How to Find an Agent
To connect with one of our agents about crop insurance for your operations, fill out the contact form to the right. You can also browse our agent page to learn more about our team of crop insurance agents. If you find an agent you’d like to work with, you can reach out to them directly using their contact information listed on their profile.
The RMA also offers a list of agents through their Agent Locator app. This app allows users to search for agents by location, crop specialty or name. Although it is a helpful starting point, the app generally provides very limited information, typically including contact details and any self-reported specialties.
When looking for a crop insurance agent, it’s also important to understand that premium rates are set by the government, so agents cannot compete on price. For that reason, you should look for knowledgeable, experienced agents who stay current on RMA updates and changes. Additionally, while experience, available tools, and a high level of customer service are all important when choosing a crop insurance agent, you should also look for an agent who is ethical, trustworthy, and committed to acting in the best interest of your operation.
How are Silveus Agents Different?
Silveus Insurance Group agents focus on building risk management strategies tailored to your operation that are supported by reliable data. Using proprietary software tools, our team works alongside you to analyze historical performance and align coverage decisions with the realities of your farm.
At Silveus, the job isn’t finished once the policy is signed. Our teams help you stay ahead of key dates, understand how your yields impact coverage triggers, and navigate the details of today’s agricultural programs. From policy questions to ongoing strategy adjustments, you have access to timely information when it matters most.
We also prioritize reducing the administrative burden wherever possible. By integrating precision farming data into your crop insurance reporting, our team helps streamline paperwork while maintaining accuracy and compliance. Paired with clear communication and dependable service, this support is designed to help you make confident, informed risk management decisions throughout the year.
Silveus Insurance Group agents focus on building risk management strategies tailored to your operation that are supported by reliable data. Using proprietary software tools, our team works alongside you to analyze historical performance and align coverage decisions with the realities of your farm.
At Silveus, the job isn’t finished once the policy is signed. Our teams help you stay ahead of key dates, understand how your yields impact coverage triggers, and navigate the details of today’s agricultural programs. From policy questions to ongoing strategy adjustments, you have access to timely information when it matters most.
We also prioritize reducing the administrative burden wherever possible. By integrating precision farming data into your crop insurance reporting, our team helps streamline paperwork while maintaining accuracy and compliance. Paired with clear communication and dependable service, this support is designed to help you make confident, informed risk management decisions throughout the year.
Silveus Insurance Group agents focus on building risk management strategies tailored to your operation that are supported by reliable data. Using proprietary software tools, our team works alongside you to analyze historical performance and align coverage decisions with the realities of your farm.
At Silveus, the job isn’t finished once the policy is signed. Our teams help you stay ahead of key dates, understand how your yields impact coverage triggers, and navigate the details of today’s agricultural programs. From policy questions to ongoing strategy adjustments, you have access to timely information when it matters most.
We also prioritize reducing the administrative burden wherever possible. By integrating precision farming data into your crop insurance reporting, our team helps streamline paperwork while maintaining accuracy and compliance. Paired with clear communication and dependable service, this support is designed to help you make confident, informed risk management decisions throughout the year.
More About our Agents!
Learn more about our agents!
