Area Revenue Protection / Area Revenue Protection with Harvest Price Exclusion
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
© Copyright 2024