Iowa Crop Insurance
At Thams Agency, we understand farming and crop insurance. Our beginnings began when we started offering crop insurance as the very first policy on the Farm of Kenneth Thams in 1934. Today Thams Agency has 4 licensed agents who are still active in farming today.
Crop insurance is essential to farmers’ livelihood and has never been more important than now. Recent climate change has brought unexpected weather conditions and, in turn, greater risks in the past decade. Farmers have two options when it comes to insuring their crops: multiple peril crop insurance (MPCI) and crop-hail insurance. While all weather conditions present risk, hail is unusual because it can completely obliterate part of a field while leaving the rest virtually untouched, it is difficult to predict and it occurs suddenly.
Crop-hail insurance is different than MPCI because it is not part of the federal crop insurance program. Instead, private crop insurance companies sell these policies, and the premiums are not subsidized.
Another key difference between the two types of coverage is that, unlike MPCI, farmers may purchase a crop-hail policy at any time during the growing season. Also, while MPCI policies tend to have high deductibles to cover catastrophic loss of huge yields, crop-hail allows for a smaller deductible to cover spot losses.
Many MPCI policies already include some coverage for hail damage, so crop-hail is intended to offset that deductible and provide protection on an acre-by-acre basis. That way, if there is damage to only part of the farmland, which is not an uncommon pattern for hailstorms, you may still be eligible for payment.
Multi Peril Crop Insurance (MPCI)
Multiple-peril crop insurance (MPCI) provides farmers with protection against losses due to weather and other perils for more than 100 crops across the country. Though it varies widely by policy and depends largely on the type of crop insured, some examples of covered hazards include damages from adverse weather, natural disaster, insect infestation, disease and wildlife damage. MPCI will never cover losses resulting from irresponsible farming practices, low prices or theft, though depending on the crop, it may cover costs of late planting, replanting, poor-quality yields and low yields.
A Public-Private Partnership
The U.S. Department of Agriculture (USDA) manages MPCI through a public-private partnership, meaning the federal government subsidizes the premiums, but private companies write all MPCI policies. There are currently 15 companies authorized by the USDA to provide MPCI coverage, and you can find that list here. The USDA requires these companies to sell MPCI policies to any eligible farmer who requests it, and the USDA Risk Management Agency (RMA) uniformly sets all the rates and determines what crops may be insured in which regions of the country.
The RMA calculates amount of MPCI coverage based on the actual production history (APH) for each farm. APH numbers come from farmer production records from the past four, and up to the past 10, consecutive crop years. Coverage levels generally range from 50 to 75 percent of the farm’s APH, the USDA RMA grants up to 85 percent coverage for select crops in certain counties.
A MPCI policy also requires election of an indemnity price, which can be anywhere between 60 and 100 percent of the Federal Crop Insurance Corporation (FCIC) expected market price. Indemnities are paid when the grower’s yield falls below the calculated yield guarantee (APH times the insured acreage times the level of coverage times the farmer’s elected share).
Obviously, electing a higher indemnity price will result in higher indemnity payments and more expensive premiums, but in years with low yields or in the event of loss, the compensation will be much greater.
The When and the Why
Unlike a crop-hail policy, which farmers may purchase at any time during the growing season, you must purchase an MPCI policy prior to planting. It is a continuous policy that will remain in effect for each crop year following acceptance of the original application. Farmers may change the policy on or before the sales closing date, and cancellations may only be made after the first effective crop year.
There are endless benefits to purchasing a MPCI or Crop Hail policy, among them confidence, stability, improved financial management and comfort in knowing there is a safety net for unexpected loss and associated costs. Contact us or call us at 712-263-3193 to learn more about your MPCI options.
Our clients say it best….
The agents at Thams make you feel like you are part of a family. They are extremely personable and the level of communication exceeds any company I have had experience with.
Client since 2004
We feel that we have professionals serving our every need at the Thams Agency whether it be house, auto, or health. One stop takes care of all of our insurance needs, and we know it’s done right. P.S. Your offices are lovely. Good move on your part to remodel and maintain the historical attributes of the building while still making it modern.
You served my folks well and I have found no reason to switch elsewhere. Your company seems rooted in Denison and an asset to the community, which is always an important part of being in business in any community.
Virginia Dobler McCurdyCustomer since 2011
Thams Agency has an honest, and straight forward approach to dealing with customers. They work hard to find the best insurance coverages and prices for the customer, while giving guidance and reasoning for customers to make the most informed decision possible.
After switching to Thams, I feel like I am getting as good, maybe even slightly better property insurance coverage for a whole lot less money. As long as the premium does not take any significant jumps in the next few years then I believe this was a great switch to Thams. Very friendly staff. I feel like I should have gone to see them many years ago.
Brian E.Customer since 2014
They have helped reduce my payments with discounts like homeowner, safe driving, multi car, etc. Their rates are better then the old insurance company I had, they just kept raising rates although I had never had an accident (and they didn’t have discounts either). When I first came in to to talk to Todd and ask about their rates, they were 50 % lower then what I was paying. Now they are even lower due to discounts.