Calculation Worksheet for
Area Revenue Protection /
Area Revenue Protection with Harvest Price Exclusion
ARP/ARP-HPE are county-based revenue insurance products that pay the producer in the event the final county
revenue falls below the Trigger Revenue level. ARP/ARP-HPE are based on the same principle as Area Yield Protection
(AYP), but guarantees revenue instead of yield.
ARP is similar to ARP-HPE, but with an added Harvest Revenue Option. For additional premium, this plan offers “upside”
Harvest Price Protection by valuing lost bushels at the Harvest Price in addition to the coverage offered under ARPHPE. ARP will pay a loss when the Final County Revenue is less than the Trigger Revenue, which is calculated using the
higher of the Projected Price or Harvest Price.
How Does It Work?
•
•
Sample Calculation
Indeminity Payment: Area Revenue Protection
Note: An indemnity will be paid only if Final County Revenue is less than the Trigger Revenue.
160.2
BU.
PER
ACRE
x
Expected County
Yield
160.2
BU.
PER
ACRE
PER
BU.
x 90%
Greater of Proj.
or Harv. Price
x
Expected County
Yield
$5.80
$5.80
$5.80
Coverage
Level
x 120%
Greater of Proj.
or Harv. Price
x
Harvest
Price
137.6
=
Select from
70% - 90% in 5%
Increments
=
$836.24
Trigger Revenue
=
Select from
80% - 120% in
1% Increments
Final Policy
Protection
$798.08
$836.24
Final County
Revenue
Trigger Revenue
$836.24 - $798.08 = $38.16 ÷
$836.24 -
160.2 x $5.80 x
Trigger Revenue
Trigger Revenue
Expected
County
Yield
Final County
Revenue
0.057
x
Payment Factor
Shortfall
$1,114.99
=
Benefits
$1,114.99
Protection Factor
Final County
Yield
•
Greater of
Proj. or Harv.
Price
•
•
0.18
Loss Limit
Factor
= 0.057
Payment
Factor
Indemnity Payment
•
Indeminity Payment: Area Revenue Protection- Harvest Price Excluded
Note: An indemnity will be paid only if Final County Revenue is less than the Trigger Revenue.
160.2
BU.
PER
ACRE
x
Expected County
Yield
160.2
BU.
PER
ACRE
PER
BU.
x
$5.30
x
137.6
0.00
Payment Factor
x 120%
=
Final County
Revenue
x
$1,018.87
Final Policy Protection
=
Select from
80% - 120% in
1% Increments
$764.15
Final County
Revenue
Trigger Revenue
$764.15 -
160.2 x $5.30 x
Trigger Revenue
Expected
County
Yield
=
$0.00
Indemnity Payment
Producers may not purchase ARP/
ARP-HPE and MPCI coverage for the
same crop and year. ARP/ARP-HPE
does not include replanting, late
planting, prevented planting, unitby-unit, or acre-by-acre coverage.
$1,018.87
$798.08
Projected
Price
Flexible program that allows
the producer to choose
between several coverage
levels and amounts of
protection
ARP allows the producer to
increase Expected County
Revenue if the harvest price
is higher than the Projected
Price
Subsidized by Federal Crop
Insurance Corporation
(FCIC) and protects against
widespread loss of yield in a
county
Fits well with a full
coverage crop hail policy,
which provides additional
coverages
Restrictions
Trigger Revenue
Final Policy
Protection
$0.00 ÷
Shortfall
$764.15
Protection Factor
Final County
Yield
$764.15 - $798.08 =
=
Select from
70% - 90% in 5%
Increments
Coverage
Level
Projected Price
Harvest
Price
Trigger Revenue
x 90%
Projected Price
Expected County
Yield
$5.80
$5.30
•
$63.55
Final Policy Protection
Uses county yields based on
National Agriculture Statistics
Service (NASS) data
The Commodity Exchange
Price Provisions (CEPP)
are used to determine the
Projected and Harvest Prices
Pays an indemnity if the
Final County Revenue is
lower than selected Trigger
Revenue
Coverage Level
0.18
Loss Limit
Factor
= 0.000
Payment
Factor
ARP/ARP-HPE allows the producer
to select any coverage level shown
on the actuarial documents for each
crop, type, and practice.
ARP/ARP-HPE Calculation Worksheet
Area Revenue Protection (ARP)
BU.
PER
ACRE
Crop: ___________________
x
Expected County
Yield
NOTE: An indemnity will
be paid only if the Final
County Revenue is less
than the Trigger Revenue.
BU.
PER
ACRE
Farmers Mutual Hail Insurance Company
of Iowa is an equal opportunity provider.
x
Greater of Proj.
or Harv. Price
x
Expected County
Yield
Greater of Proj.
or Harv. Price
Harvest Price
Trigger Revenue
=
Final County
Revenue
Trigger Revenue
Expected County
Yield
BU.
PER
ACRE
Harvest Price
=
Final County
Revenue
Trigger Revenue
x
Greater of
Proj. or Harv.
Price
Loss Limit
Factor
Select from
70% - 90% in 5%
Increments
Projected Price
Payment
Factor
Indemnity
Payment
=
Coverage
Level
x
Trigger Revenue
Select from
80% - 120% in
1% Increments
=
Protection Factor
Final Policy
Protection
Final County
Revenue
Trigger Revenue
=
Final County
Yield
÷
Shortfall
Final Policy Protection
Projected Price
x
=
=
x
x
Trigger Revenue
Final County
Revenue
Expected
County Yield
x
Expected County
Yield
-
Final Policy
Protection
x
Payment Factor
BU.
PER
ACRE
=
Protection Factor
x
Crop: ___________________
NOTE: An indemnity will
be paid only if the Final
County Revenue is less
than the Trigger Revenue.
Select from
80% - 120% in
1% Increments
Final County
Yield
NOTE: ARPI does not include replanting, late planting,
prevented planting, unit-by-unit or acre-by-acre
coverage. Consult an FMH agent in your area to find out
what crops can be insured in specific states and counties.
Not all crops in all states are eligible or insurable. This
is for illustrative purposes only and is not a contract. It
is intended to provide a general overview of the plan
described. Only the insurance policy can give the actual
terms, coverage, amounts, conditions and exclusions.
Area Revenue Protection
with Harvest Price Exclusion
(ARP-HPE)
Trigger Revenue
=
÷
Shortfall
=
Coverage
Level
x
x
-
Select from
70% - 90% in 5%
Increments
Trigger Revenue
x
Expected
County Yield
x
Projected
Price
x
Payment
Factor
=
Loss Limit
Factor
Payment
Factor
=
Final Policy Protection
Indemnity
Payment