Production Insurance
Plums

How it works

​​​​​​​

When you enrol in Production Insurance, you are guaranteed a level of production based on your yield history and the level of coverage you choose. A claim may be paid if an insured peril causes your yield to fall below your guaranteed value.

Insured Perils

  • Drought
  • Excessive heat
  • Excessive moisture
  • Freeze injury
  • Frost
  • Hail
  • Excessive wind
  • Tornado
  • Unavoidable pollination failure due to adverse weather conditions

Plum​​​​ trees

The fruit tree rider is added to your coverage if your trees were insured in the previous crop year, or if you notified Agricorp by September 1 and meet eligibility requirements. Newly planted trees must have been planted by June 10 to be eligible for coverage in the next crop year. 

The fruit tree rider gives you additional protection if your plum trees die as a result of one or more of these insured perils:

  • Drought
  • Excessive wind causing structural damage
  • Freeze injury
  • Flood
  • Hail
  • Ice damage
  • Lightening
  • Tornado

For more information about this coverage, including how to qualify, see the Fruit Tree and Grapevine Riders Production Insurance Document.​

Losses due to uninsured perils

Losses due to uninsured perils such as improper use of pesticides, third-party damage or spray drift, shortage of labour or machinery, insect infestation or plant disease are not covered by Production Insurance unless specifically noted.

Yield losses caused by uninsured perils are removed from your guaranteed value before any claim is calculated.

If the final yield used for insurance claim purposes is less than your guaranteed value (adjusted for any loss due to uninsured perils), a production claim may be paid on the difference. If the final yield is equal to or greater than your guaranteed value (after adjustment for uninsured perils), no production claim is payable.

​​Calculating your coverage an​​d claims

​Your coverage depends on:

  • Your final average yield
  • Your claim price
  • Your coverage level
  • Your guaranteed production
  • Your guaranteed value

Final average yi​eld (F​AY)

An FAY is calculated and used as a benchmark to determine if your actual production i​​​s below average.

Please refer to the Final Average​ Yield feature sheet. 

FAY for existing participants

Your FAY is based on your six most recent years of actual yields.

FAY for new participants

You are assigned an underwritten FAY for the first five or six years of production based on a variety of factors such as location, tree age and health, soil type, etc. For more details, see the Plan Overview.

Each year that you participate in the plan, your actual yield replaces an underwritten yield until your FAY is composed entirely of your own actual yields.

Yield Buffering

Unusually high and low yields are adjusted (buffered) to stabilize and lessen the impact of extreme yields on your FAY.

  • If your actual yield is above the upper threshold (130 per cent of your FAY), the yield is buffered two-thirds of the way down to the upper threshold.
  • If your actual yield is below the lower threshold (70 per cent of your FAY), the yield is buffered two-thirds of the way up to the lower threshold.

Quality factors

If an insured peril reduces the quality of a crop, a quality factor may be applied to the yield to better reflect the price you receive.

If the crop is reduced in quality but can still be sold, the yield is factored down to reflect the loss in revenue.

Quality factor = Price received for crop / Fresh claim price

Claim price

When you apply or renew, you select a claim price, which determines your guaranteed value.

Coverage level

When you apply or renew, you choose a coverage level. It determines your guaranteed production.

Guaranteed production

Guaranteed production is determined by multiplying your FAY by your selected coverage level. This number is used to calculate your guaranteed value.

Guaranteed value

Guaranteed value converts your guaranteed production into a dollar amount so your premiums can be calculated and any production claims can be paid.

Guaranteed value = Guaranteed production x your selected claim price

Coverage options

Multi-peril coverage for all fresh and processing varieties. See the plan overview for details on the insured perils.

Choose your tree coverage option

Starting in 2017, your trees are eligible for Production Insurance. Before deciding on this year’s coverage, ask yourself: What changes have you made to your business? What risks does your farm face this year? Will your current coverage protect you if you experience a severe, unexpected loss? Choose either standard tree loss coverage, at no cost to you, or additional tree loss coverage, offering you greater coverage at a lower deductible level.

Below is an example to help you assess tree coverage options and choose which option best meets your business needs.

Example

Scenario 

You have a peach orchard with1,000 trees. You lose 200 trees due to freeze injury.

Calculating your options

*Rates used in this example: Premium rate for additional tree coverage: 0.20%; claim price for trees: $21.77; deductible rate for standard tree coverage: 11%; deductible rate for additional tree coverage: 6%.

Standard
Coverage

Higher deductible
11%
Additional
Coverage

Lower deductable
6%
Premium
 
$0 
Premium
 
$43.54
Premium
Step 1:
Calculate your premium
Your premium = $0
The federal and provincial governments pay the premium on your behalf.
Your premium
= premium rate*
× # of trees
× claim price*
= 0.20%
× 1,000
× $21.77
= $43.54
Step 2:
Calculate your deductible
Deductible
= # of trees
× deductible rate for standard tree coverage*
= 1,000
× 11%
= 110 trees
Deductible
= # of trees
× deductible rate for additional tree coverage*
= 1,000
× 6%
= 60 trees
Step 3:
Calculate your tree loss claim
Claim
= (# of trees lost 
– deductible)
× claim price
= (200 – 110)
× $21.77
= 90
× $21.77
= $1,959.30
Claim
= (# of trees lost 
– deductible)
× claim price
= (200 – 60)
× $21.77
= 140
× $21.77
= $3,047.80
Claim
$1,959.30
Claim
$3,047.80
Claim





Growing Forward 2 – Agricorp – Ontario – Canada