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 production.
Coverage begins May 18 and ends at the completion of harvest. Frost coverage ends at noon on October 1.
- Excessive heat
- Excessive rain
- Insect infestation and plant disease*
* Provided good farm management practices are followed.
Losses due to uninsured perils
Losses due to uninsured perils such as improper use of pesticides, third-party damage or spray drift are not covered by Production Insurance.
Yield losses caused by uninsured perils are removed from your guaranteed production before any claim is calculated.
If the final yield used for insurance claim purposes is less than your guaranteed production (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 production (after adjustment for uninsured perils), no production claim is payable.
Calculating your coverage and claims
Your coverage depends on:
- Average farm yield
- Coverage level
Average farm yield (AFY)
We calculate an AFY to be used as a benchmark to determine if your actual production is below average.
AFY for existing plan participants
Your AFY is calculated using up to the past 10 years of your own reported yields. It is an average of your buffered yields.
AFY for new plan participants
Each crop is assigned an underwritten five-year AFY that is based on a variety of factors such as soil type, drainage, township averages, etc.
Each year that you participate in the plan, your actual yield replaces an underwritten yield until your AFY is composed entirely of your own actual yields.
Unusually high and low yields are adjusted to stabilize and lessen the impact of extreme yields on your AFY.
- If your actual yield is above the upper threshold (130 per cent of your AFY), the yield is buffered down to the upper threshold.
- If your actual yield is below the lower threshold (70 per cent of your AFY), the yield is buffered up to the lower threshold.
When you apply or renew each year, you choose one coverage level for each crop. It is used to determine your guaranteed production.
If an insured peril causes your actual yield to fall below your guaranteed production, a production claim may be paid on the difference.
The guaranteed production is based on your AFY (as determined by Agricorp) multiplied by your selected coverage and acreage.
The claim price is used to calculate your claim if an insured peril causes your yield to fall below your guaranteed production. The claim price is calculated each year at renewal time.
The following benefits are in addition to regular production claims.
Refer to the Contract of Insurance for more information.
Price protection benefit
If an insured peril damages your tobacco and you must sell it at a lower grade, you may be eligible for a price protection benefit. This benefit guarantees up to 95 per cent of the average industry price as determined annually by Agricorp.
If you have a minimum of three acres of continuous damage, as verified by an Agricorp adjuster, you may be eligible for a replanting benefit. You must report damage before replanting.
If an insured peril damages your crop between mid-June and mid-September, the salvage benefit helps pay the costs of salvaging your crop. There is a basic benefit amount per acre plus an additional amount for damage caused by hail and/or wind, to a maximum of benefit per acre. There is also a maximum rate paid for labour costs.
Each year, adjusters do random acreage checks on a small percentage of participants. When a producer has planted more acres than he or she reported to Agricorp, the number of overplanted acres is deducted from the total acres reported for a claim.
For example, if a producer reports 20 acres, but Agricorp measures 22, two acres would be deducted from the claim for a replanting and/or salvage benefit.