Source: National Crop Insurance Services
The Federal crop insurance program is built on a unique public-private partnership. Under this successful model, farmers purchase a personalized crop insurance policy from any one of the private insurance companies – known as Approved Insurance Providers, or AIPs – authorized to sell and service crop insurance by the U.S. Department of Agriculture (USDA).
But how does private-sector delivery of crop insurance protect farmers?
Watch our new video – featuring real farmers, real agents, and real adjusters – to learn watch this short video.
Crop insurance companies work together with the USDA to improve the regulatory framework of crop insurance, improve program delivery, and expand participation. While the USDA sets rates and rules for the various plans of insurance that can be sold by private crop insurance agents, it is the responsibility of crop insurance companies to write policies, as well as adjust and process claims.
That means when disaster strikes, private-sector crop insurance companies react quickly to assess damages and issue payments. Crop insurance assistance is usually delivered within just 30 days of a claim being finalized, making crop insurance faster than disaster aid and providing farmers and the communities that rely on them with a critical safety net.
Private-sector crop insurers spend millions on research, training, and new technology to constantly improve efficiency and help farmers better adapt to the changing climate.
Not only that, but the dynamic nature of crop insurance and the strong partnership between crop insurers and the Federal government means that the program can quickly adapt to reflect farmers’ risks and the voluntary adoption of proven climate-smart agriculture practices.
That’s why Congress has made crop insurance the cornerstone of the farm safety net. Crop insurance must be protected and strengthened in the next Farm Bill.
Just the Facts
Why is private-sector delivery of crop insurance important?
Private-sector delivery is a key strength of crop insurance because time is of the essence when a major loss occurs and farmers need money to meet financial obligations.
Government ad hoc disaster programs are notoriously slow in getting Congressional approval and then gearing up to deliver payments to farmers, often taking as long as 18 months to two years after a disaster for help to finally arrive. Crop insurance, on the other hand, is a highly dynamic program that is closely tailored to each farmer’s operation and generally delivers assistance within 30 days of a claim being finalized.