Crop Insurance Product
Revenue Assurance (RA)
Revenue Assurance (RA) is a product that has evolved to mirror Crop Revenue Coverage (CRC) in certain scenarios or Income Protection (IP) in others.
Depending on your farming operation or desired risk, RA may be a product that fits your needs.
APH (Actual Production History) - The yield information for previous years, including planted acreage and harvested production. Used by us to determine your yield for insurance purposes.
Levels of Coverage - You may insure your APH at 65%, 70%, or 75%. Some areas have 80% and 85% availability.
Spring Price - 100% of the average closing price of the December Futures Contract of the Chicago Board of Trade (CBOT) during the month of February for Corn. For Soybeans, it is 100% of the average closing price for November Futures Contract on the CBOT during the month
of February.
Harvest Price - 100% of the average closing price during November for the December CBOT Corn Contract. For Soybeans, 100% of the average closing price during October for the November CBOT.
Harvest Price Option - An option that allows you to use the greater of either the projected harvest price, or the Fall harvest price to determine your revenue guarantee. This must be elected by the sales closing date.
Does cost vary from agent to agent?
No. Federal Crop Insurance Corporation (FCIC) sets the rates. However, different approved yields, levels of coverage, or unit structure will affect your cost per acre.
Example of how RA works:
- Crop: Corn
- Level of Coverage: 85%
- Unit structure: Basic
- Spring Price: $2.30 per bushel
- Acres: 80
- Fall Price: $2.00 per bushel
- APH: 150 bushels per acre
- Harvested bushels: 120 per acre
- Interest: 100%
150 APH x 85% level of coverage x $2.30 per bushel = $293 guarantee
120 bu. harvested x $2.00 Fall price = $240 Revenue to Count
$293-$240 = $53 per acre loss x 80 acres x 100% interest = $4240 Loss Award
The $293 guarantee per acre is the maximum amount of coverage. If the harvest price increases, it will take fewer bushels to meet the guarantee. In the example above, if the Fall harvest price was $2.50 per bushel, there would not have been a payable loss.
150 APH x 85% level of coverage x $2.30 per bushel = $293 guarantee
120 bu. harvested x $2.50 Fall price = $300 Revenue to Count
No Payable Loss!
Example of how RA-HPO works:
With the Harvest Price Option, should the Fall price increase over the
Spring price, the guarantee would automatically be increased at no additional premium. In the above example when the harvest price increased to $2.50, the guarantee would have been recalculated.
150 APH x 85% level of coverage x $2.50 per bushel = $319 new guarantee per acre
120 bu. harvested x $2.50 Fall price=$300 Revenue to Count
$319-$300 = $19 per acre loss x 80 acres x100% interest = $1520 Loss Award
Additional coverages:
Late planting coverage
Replant provisions
Prevented planting
Quality adjustment
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