Tiffany Lashmet discusses PRF or “rainfall” insurance coverage in her newest Texas Agriculture Regulation Weblog and how you can analyze whether or not to buy.
The Pasture, Vary, and Forage Insurance coverage (PRF) deadline to enroll in protection for 2023 is on December 1. Sometimes called “rainfall insurance coverage,” this product is usually a helpful danger administration device for landowners and livestock producers. The product supplies insurance coverage protection for grazing pastures, rangeland, and perennial forage acres.
Basically, PRF permits a landowner to insure a sure proportion of historic rainfall within the space the place they personal property. If the precise rainfall within the space falls beneath the insured proportion, the landowner receives an indemnity fee. PRF could also be bought from any crop insurance coverage agent. agent may help stroll by the main points of the insurance coverage product and help with the selections {that a} landowner should make within the signup course of.
Step one in analyzing whether or not to buy PRF insurance coverage is to find out the “grid” the place the property is situated. The historic rainfall used to determine PRF insurance coverage protection is tied to particular grids, with each being roughly 17 miles by 17 miles. Do be aware that land will be situated in a number of grids relying on how the grid traces fall. As soon as a landowner determines the grid(s) she or he can use for PRF protection, the USDA PRF Help Instrument can be utilized to see the assorted decisions out there. The landowner can click on on “Historic Indexes” and see the rainfall % of regular in that grid for the final 74 years.
For instance, I personal land in Grid 18716. As you possibly can see beneath, in January-February of 2021, my grid obtained 68.8% of regular rainfall. As a result of I insured 85% of regular rainfall in that interval, I obtained an indemnity fee. Wanting on the Could-June interval, my grid obtained 110.6% of regular rainfall and no indemnity fee was triggered underneath my PRF coverage.
The following step for landowners is to research choices together with which intervals they are going to insure, the extent of rainfall they are going to insure, the productiveness issue, and the proportion of protection in every interval. Once more, crop insurance coverage agent may help stroll by every of those selections. The USDA PRF Help Instrument may even enable landowners to place in info and examine the historic outcomes with completely different combos of protection ranges, productiveness worth, and intervals insured.
For instance, wanting once more at my grid, when the rainfall was 68.8% in January-February, with my given protection ranges, I obtained an indemnity of $212. The quantity of fee right here will depend on the proportion of rainfall insured, productiveness worth chosen, and % of worth chosen for that interval. Nevertheless, had I made a decision to insure February-March as an alternative of January-February, I might have obtained no indemnity fee as a result of in that interval, rainfall was 111% of regular.
For extra info on PRF Insurance coverage:
- Podcast with Jason Johnson speaking about this system and strolling by every of the selections a landowner has to make.
- Justin Benavidez’s weblog publish, “PRF resolution for upcoming 12 months,” walks by the main points of the PRF selections.
Supply: Texas Agriculture Regulation Weblog
