OPTIONS TO A BASIC APPLE INSURANCE POLICY

1
OPTIONS TO A BASIC APPLE INSURANCE POLICY

• Adding additional quality based coverage to your
  apple policy

2
Perils Excluded From the Basic Policy

• Size
• Color
• Shape
• Russeting
• These perils are insured causes of loss when a
  producer adds the quality endorsement.

3
Breakdown by Varietal Group

• Varietal Group A Fuji, Braeburn, Gala,
  Jonagold, Crispin, Pink Lady, Cameo, Honeycrisp,
  Sommerfeld, Royal Gala, and Macoun
• Varietal Group B All varieties not listed in
  Group A
• Processing Group Varieties grown for processing
  only can be excluded from the quality option and
  insured as processing apples at the same level of
  coverage.

4
Separate Database Records

• Separate APH must be available for each varietal
  group. A maximum of 5 years is included to
  determine average production
• Separate annual packout percentages by varietal
  group are averaged for 4 years. Most recent year
  is not included in the average to determine
  historical packout percentage.

5
Insuring For More Than Bushels

• Producers insure for a combination of bushels and
  Fancy or better grade apples.
• Coverage is calculated using the producers APH
  and historical packout percentage.
• Each varietal group will be insured
  independently, but both must be insured at the
  same level of coverage.
• Available for any buyup level from 50 to 75.

6
Price Elections for 2003
7
Calculating s of Coverage

• The Producers APH x Level of Coverage x
  Historical Packout for Fancy is multiplied by
  the Price Election for the Varietal Group
• PLUS
• The Producers APH x Level of Coverage x
  Historical Packout for All Other is multiplied
  by the All Other Price Election

8
s of Coverage Example

• For Varietal Group A, the producer has a 500 bu
  APH, a 60 Historical Packout and chooses 65
  coverage level
• 500 x 65 x 60 x 12.20 2379
• PLUS
• 500 x 65 x 40 x 1.85 241
• TOTAL of 2620 per acre

9
Separate Units

• Each variety is not insured separately, BUT
• Each Varietal Group is a separate unit when
  calculating s of coverage
• Same calculations as shown previously would be
  done to determine s of coverage for Varietal
  Group B
• Optional Processing apples can be insured
  without the quality option as a separate unit.

10
Grade Appraisal at Harvest

• VERY IMPORTANT A grade appraisal must be
  performed by an insurance adjuster before any
  harvested apples are placed in storage.
• Failure to meet this requirement will result in
  all apples not graded being counted as U.S. Fancy.

11
Loss Calculations

• A combination of loss in production and/or
  reduced packout percentage can trigger a loss.
• Cull apples are not considered in the value of
  production to count unless sold.
• Cull apples sold are included in the value at the
  net value received.

12
Quality Factors
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Loss Calculation ExamplePoor Yield, Good Quality

• Using 500 bu APH, 60 historical packout, and 65
  level of coverage 2620/acre
• Harvested 250 bushel with 75 packout
• 250 x 75 x 12.20 2288 PLUS
• 250 x 25 x 1.85 116 Total of 2404
• Indemnity Payment of 216/acre

14
Loss CalculationAvg Yield, Poor Quality

• Using 500 bu APH, 60 historical packout, and 65
  level of coverage 2620/acre
• Harvested 450 bu with 30 packout
• 450 x 30 135 less 54 bushel (Quality Factor
  of .60) 81 bushel x 12.20 988 PLUS
• 450 X 70 315 plus 54 bushel (from Quality
  Factor reduction) 369 x 1.85 683
• 2620 - 1671 949 Indemnity Payment

15
Premium Costs

• Premium is calculated based on the APH, Packout
  Percent, Level of Coverage, and Varietal Group
• The higher the Historical Packout The higher
  the premium per acre The higher the s of
  coverage

16
Premium Example Kent County, 500 bu APH, 60
Packout, 35 acres Group A, 65 acres Group B
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Premium Comparison
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Interested?

• Contact a Crop Insurance Agent
• At Spartan Insurance
• 800 888-2767
• Or
• Call Your Local GreenStone Farm Credit Services
  branch office