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Rockford, IL | As many of you may know from my speaking engagements or my written articles I have been a big proponent of Private Insurance Products going back to probably 2012. Over this time frame my clients as a whole have greatly benefited from these opportunities. Sure we have used different products for different years since every year we may have differents risk needs to cover but luckily we have many different options. There will always be some that outproduced or come in abover the addiitonal revenue guarantee these products provided which is not a bad thing in my book.
In regards to the products that provide a higher band of coverage (ICE, RAMP, VIP) we have had great results. If you feel that the price is too high than lower the $ amount of coverange within that higher band of coverage to where the price is more tolerable OR purchase a 5% band instead of a 10% band. It does not have to be all or nothing at least in my mind. Once you have a premium that makes more sense to you it comes down to if you want some coverage on your top dollar loss or not. These products can also have any type of top dollar coverage your want regardless of your MPCI. You can have optional units even if your MPCI has Enterprise Unit coverage (which I really like). You can have Yield coverage even if your MPCI is Revenue Coverage or vice versa.
Part of risk management is covering areas of risk that are more likely to happen and also shifting risk to scenarios that are less likely to happen within the crop year. Crop Insurnace and Private Insurance Products can do both.
In regards to ARC and PLC there are calculators out there that can help you make that decision that take a lot of the guess work out of it. Also keep in mind that due to the government shutdown we likey will not have to make our ARC/PLC election until the May/June/July timeframe which should give us a better handle at that point what is happening. This decision will impact a 2-year window and after that we will get to chose what program we want each year. The last I have heard is that most within the FSA offices have been trained in any way on the program yet.
It appears that PLC looks to be the best option for everything other than soybeans but I would encourage you to also go with PLC on your soybeans so you have the ability to purchase SCO which is a subsidized MPCI option that gives you an area band of coverage from 86% down to your chosen MPCI level. Keep in mind that that band is area coverage and not individual coverage but I think it makes a lot of sense. Pretty inexpensive as well. If choosing SCO it has to be done by March 15 as it is a subsidized insurance product.
I hope this sheds a little more light on the original question asked.
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Got my postcard.
