Crop and Livestock Income Protection: CLIP
CLIP is designed to help producers in areas where high RP coverage levels have become too costly or out of reach. This is a solution for producers wanting to reach 85% coverage without spending a significant amount on premiums.
What It Is
CLIP is an umbrella revenue coverage for producers who insure multiple commodities to provide coverage levels up to 85%. By combining multiple crops and/or livestock into a single policy, it increases the overall insured revenue guarantee for the producer’s combined operation.
Instead of buying high-coverage levels crop-by-crop, CLIP allows you to apply an additional layer of protection across your entire farm (within one county) at a more affordable cost.
Bundling Policies Saves You Premium
CLIP combines farmers’ underlying Revenue Protection (RP) crops (and/or livestock) in the county into one single CLIP unit. Bundling multiple commodities into a single CLIP unit allows for premium savings compared to reaching the same coverage levels on each individual policy.
Farmers get to pick and choose which of their policies to bundle, as long as there are at least two.
Multiple Crops with One Coverage On Top.
How Does CLIP Work?
Imagine CLIP as a single, stronger safety net that catches your entire farm operation’s revenue when things go bad. It is sitting just above the individual crop insurance policies you already have.
Instead of looking at Corn, Soybeans, and Wheat individually, CLIP views all the crops you enroll in it as one single CLIP unit.
CLIP doesn’t replace your underlying RP coverage; it only insures the gap between your existing coverage and the higher level you choose for CLIP (up to 85%).
All three crop policies are under the umbrella of the CLIP 85% coverage.Â
How Indemnities Work.
1. Individual Policy Payouts First:
If one of your individual crops (like corn) has a bad year, your Revenue Protection (RP) policy pays you an indemnity first, bringing that specific crop’s revenue up to its individual guarantee (75%, for example).
2. The Total CLIP Guarantee:
CLIP adds up your guaranteed revenue from all enrolled crops under CLIP. This combined CLIP Guarantee represents the highest coverage level you elected (up to 85%) across the whole unit.
3. The CLIP Payment:
CLIP adds the value of all crops harvested plus the money you already received from RP indemnity payments. If this total actual revenue is less than your CLIP Guarantee, then CLIP pays you the remaining difference.
Indemnity Examples
We will look at three scenarios of a CLIP policy for a crop season.
Corn 75% RP | Soybeans 70% RP | Spring Wheat 60% RP
SCENARIO 1: No Indemnity
All three crops had a great year, and the revenue was above the 85% CLIP Guarantee. No loss payments are owed for CLIP or any of the three Revenue Protection (RP) policies.
SCENARIO 2: RP and CLIP Indemnity Owed
All these crops were short of their revenue guarantees for their individual policies. All three RP policies paid an indemnity. CLIP paid the gap between the RP guarantees and the 85% CLIP guarantee.
SCENARIO 3: No RP Indemnity. CLIP Indemnity Owed
All three crops met their RP guarantees and no payment was owed. But all three of revenue combined did not meet the 85% CLIP Guarantee. CLIP paid the gap between the combined revenue and the 85% guarantee.
Up to 85% Levels
lower cost compared to other 85% coverage options
Must have at least two underlying policies
Stacks on top of the underlying RP policies
available in certain states only
Sign-up deadline same as earliest underlying policy
Indemnities are Separate and Paid after RP Claims and production
CLIP State Availability
CLIP Crop Availability
CLIP Program Pairing
Excluded under CLIP:
- Yield Protection​
- Revenue Protection w/ Harvest Price Exclusion​
- Prevented Planting​
- Cottonseed Endorsement​
- Downed Rice Endorsement ​
- Malting Barley Endorsement​
- Margin Protection (MP)​
- Post Application Coverage Endorsement (PACE)​
- Stacked Income protection (STAX)​
- Supplemental Coverage Option (SCO)​
- Area Plans
CLIP does NOT pair with:
Malting Barley Endorsement, MP, PACE, STAX, SCO
CLIP does pair with:
- Enhanced Coverage Option (ECO)​
- Hurricane Insurance Protection – Wind Index (HIP-WI)​
- Margin Coverage Option (MCO)​
- High Risk Land Exclusion Option (HRLEO)
Sign Up Deadline
CLIP uses the earliest commodity sign-up deadline covered under the umbrella policy.
For example, a corn and soybean RP policies would have a CLIP deadline of 3/15 in states such as South and North Dakota.
