Get paid if it rains too much or too little
Talk about the right product at the right time. If you suffered devastating crop losses due to a late spring, a hot dry summer or any combination of the above, then check out an insurance product unlike any other.
Depending upon what coverage you choose, you can get paid if May is a wipeout due to rain or July is super-hot.
The product was actually on the market in 2011, but mostly in Western states. Until recently, the company was called WeatherBill. It went live with a new website Nov. 1 as Climate Corp.
Jeff Hamlin of Climate Corp. explains that it’s not meant to replace federal crop insurance. Instead, it’s designed as a supplement to help you recapture the value of those top 40 or 50 bushels of corn per acre that might be lost to weather extremes.
• New crop insurance concept doesn’t replace federal crop insurance.
• This policy pays based on weather events, not crop performance.
• Climate Corp. is set to make a big push with more agents.
Maybe you’re already thinking “I hate to pay the premium for crop insurance now — why would I want to pay more?” Check it out first. Policies from Climate Corp. offer the opportunity to close the gap between what crop insurance covers in case of disaster and your original yield goal.
How it works
For example, if crop insurance makes you whole to 120 bushels per acre, but your goal was 180 bushels per acre, you may be able to farm next year, but you may not net much profit. Restoring profitability is the niche Climate Corp. hopes to carve out.
The company doesn’t pay off at the end of the year based on how your specific crops performed. Instead, you pick parameters, such as an amount of rainfall in May, or the number of 93-degrees-F-or-higher days during pollination for corn. Then if weather exceeds those limits, you get a check, soon after the event, no questions asked. What the crop actually makes is irrelevant. It’s all done on tons of numbers, averages, and statistics, for weather, soil type and yields.
The product the company just rolled out is much different than what it offered before, Hamlin says. It’s more localized to your own area, and even your soils. You have a say in picking risks you want covered. If your soils are droughty, expect to pay a higher premium. However, the premiums aren’t paid until the end of the crop year.
It’s the teachable moment in Indiana. Many would have received at least two checks, perhaps more, before ever harvesting the crop based on weather events in 2011. And it doesn’t affect what you get from federal crop insurance.
The company expects local crop insurance agents to carry the product. It’s geared up, increasing staff from a staff 30 to 100 for 2012. An influx of cash from outside investors allowed it to ramp up. The company spreads its risk, Hamlin says, by covering all sorts of crops all over the country.
“It’s all about numbers and localized data,” he concludes. “We want to help farmers fill the gap over and above federal crop insurance.”
Learn more at www.climate.com.
This article published in the December, 2011 edition of INDIANA PRAIRIE FARMER.