Crop Hail Insurance is a great risk management tool. Besides the hail coverage, the policy also provides fire loss coverage. It is important to recognize that this program provides coverage on a “spot loss” basis. All other farm revenue programs pay based on the average income of the farm. One with 92% coverage another with 80% or only 50% coverage. The trick is that this is of a pre-determined number not your actual anticipated revenue. In the one program where you think you have 92% coverage, the program drops the highest and the lowest income year. Your average could be lower than you think, subtract the deductible and you may only have 50 % to 60% coverage this year. The farmers that have figured this out and have explained it to me are not willing to leave 40% of their anticipated revenue at risk. The other consideration is when will you receive payment? Some tell me they have not received their money from 2004 yet! Crop Hail insurance provides immediate cash flow relief.
One guarantee is that it is going to hail this summer. Buy early, being that it hails every summer and like you, the insurance companies do not know where. So, they limit the amount of risk they will accept in a township. Once they hit that dollar amount they close that area off. This means they stop accepting policies for that area and the problem with that is that you will need to buy from another company, likely at a higher cost.
Be sure to seek advice and purchase insurance from an insurance broker who understands your business!