Crop Insurance Quiz Complete Study Guide
2026/2027 with Practice Questions and
Solutions (Already Passed A+)
• Crop Insurance Definitions -✓✓Agricultural Producer: A business that
grows and sells crops for a profit
Crop Insurance: Insurance that covers losses to a crop's profitability
Two types:
● Crop-yield insures against losses to actual crops.
● Crop-revenue insures against losses to crop value when prices change
or the
crop is damaged.
An "agricultural producer," is a business that grows, harvests, and sells
crops for profit. This definition can apply to many types of business,
ranging from private farmers, to agri-businesses, to mega-farms. For
simplicity's sake, we will just refer to agricultural producers as "farmers"
for the remainder of this chapter.
Crop insurance: protects the farmer from the risk of losing her ability to
make a profit from a crop. There are two forms of crop coverage:
Crop-yield insurance: protects against losses to the crop itself, while
crop-revenue insurance applies when a crop loses value, whether caused
by damage to the crop or by falling prices.
• Crop-Yield Insurance: -✓✓● Covers physical losses to the crop
● 2 common forms:
Crop-Hail Insurance
Multi-Peril Crop Insurance (MPCI)
• Crop-Hail Insurance -✓✓Crop-Hail Insurance:
● Type of Crop-Yield Insurance
● Covers more perils than just hail
● Typically available through private insurers
,● Not reinsured or government subsidized
There are several things you should note about how Crop-Hail coverage
works: first of all, it covers more perils than just hail.
Another important characteristic of crop-hail coverage is that it typically
is purchased through private insurers. This is because hail is a limited
peril that does not tend to affect widespread areas all at once; private
insurers usually have no problem paying all hail claims from their
reserves.
For this reason, crop-hail insurance is not reinsured or subsidized by the
Federal Government. Since private insurers can pay all of their own
claims, they do not need government backing.
• Crop Hail Coverage Details -✓✓More Important Details
● Rated on an acreage basis
● Coverage can be a percentage of expected crop value
● Policies sometimes have a minimum amount of losses required before
they will
pay anything
With this form of coverage, crops can be insured according to a
percentage
of how much the farmer expects the crops to be worth (from 50% up to
100%).Sometimes, these policies will not pay anything until a minimum
amount of losses have occurred. This minimum is usually a percentage
of the total
amount of insurance.
For example...
Say a farmer has crop-hail coverage with a $10,000 limit on 10,000
acres, with a 5% minimum loss percentage. If he sustained a loss to 10%
of his crop - which exceeds the 5% minimum - the policy would pay
$1,000 (which is 10% of $10,000).
• Crop Hail Covered Perils -✓✓Perils Covered (in addition to hail)
, ● Fire
● Lightning
● Wind (by endorsement)
● Transit to storage after harvest
● Wildfire
The crop-hail policy, as you probably guessed, is a named-peril policy.
It will specify several perils that it covers in addition to hail.
Most commonly, covered perils are: fire, lightning, wind (if added by
endorsement), transit to storage after harvest, and wildfire.
• Crop-Hail Exclusions -✓✓Typical Exclusions
1. Failure to harvest a mature crop
2. "Unit normal visible stand" (i.e. crop must be up to be covered)
3. "Before effective hour" (i.e. damage prior to start of policy)
4. Crops that can be recovered by harvesting
5. Crop not owned by the insured (e.g. share crops)
6. Damage to trees, bushes, fruit, or nut crops
7. Damage to leaves or plants, unless affecting the actual crop
For example, failure to harvest a mature crop is excluded. This makes
sense, since it is avoidable neglect on the part of the farmer.
Another exclusion is called "Unit normal visible stand," which
essentially means that the crop must be up in order to be covered.
Damage will not be covered if it occurs "Before effective hour," or in
plain
English, before the policy starts. And, if any part of the damaged crop
can be recovered by harvesting, it will be excluded from coverage as
well.
The policy also excludes share crops and other crops that the insured
does not own, as well as damage to trees, bushes, fruit, or nut crops.
Finally,
losses caused by damage to leaves or other parts of the plant are not
covered, unless they affect the actual crop.
2026/2027 with Practice Questions and
Solutions (Already Passed A+)
• Crop Insurance Definitions -✓✓Agricultural Producer: A business that
grows and sells crops for a profit
Crop Insurance: Insurance that covers losses to a crop's profitability
Two types:
● Crop-yield insures against losses to actual crops.
● Crop-revenue insures against losses to crop value when prices change
or the
crop is damaged.
An "agricultural producer," is a business that grows, harvests, and sells
crops for profit. This definition can apply to many types of business,
ranging from private farmers, to agri-businesses, to mega-farms. For
simplicity's sake, we will just refer to agricultural producers as "farmers"
for the remainder of this chapter.
Crop insurance: protects the farmer from the risk of losing her ability to
make a profit from a crop. There are two forms of crop coverage:
Crop-yield insurance: protects against losses to the crop itself, while
crop-revenue insurance applies when a crop loses value, whether caused
by damage to the crop or by falling prices.
• Crop-Yield Insurance: -✓✓● Covers physical losses to the crop
● 2 common forms:
Crop-Hail Insurance
Multi-Peril Crop Insurance (MPCI)
• Crop-Hail Insurance -✓✓Crop-Hail Insurance:
● Type of Crop-Yield Insurance
● Covers more perils than just hail
● Typically available through private insurers
,● Not reinsured or government subsidized
There are several things you should note about how Crop-Hail coverage
works: first of all, it covers more perils than just hail.
Another important characteristic of crop-hail coverage is that it typically
is purchased through private insurers. This is because hail is a limited
peril that does not tend to affect widespread areas all at once; private
insurers usually have no problem paying all hail claims from their
reserves.
For this reason, crop-hail insurance is not reinsured or subsidized by the
Federal Government. Since private insurers can pay all of their own
claims, they do not need government backing.
• Crop Hail Coverage Details -✓✓More Important Details
● Rated on an acreage basis
● Coverage can be a percentage of expected crop value
● Policies sometimes have a minimum amount of losses required before
they will
pay anything
With this form of coverage, crops can be insured according to a
percentage
of how much the farmer expects the crops to be worth (from 50% up to
100%).Sometimes, these policies will not pay anything until a minimum
amount of losses have occurred. This minimum is usually a percentage
of the total
amount of insurance.
For example...
Say a farmer has crop-hail coverage with a $10,000 limit on 10,000
acres, with a 5% minimum loss percentage. If he sustained a loss to 10%
of his crop - which exceeds the 5% minimum - the policy would pay
$1,000 (which is 10% of $10,000).
• Crop Hail Covered Perils -✓✓Perils Covered (in addition to hail)
, ● Fire
● Lightning
● Wind (by endorsement)
● Transit to storage after harvest
● Wildfire
The crop-hail policy, as you probably guessed, is a named-peril policy.
It will specify several perils that it covers in addition to hail.
Most commonly, covered perils are: fire, lightning, wind (if added by
endorsement), transit to storage after harvest, and wildfire.
• Crop-Hail Exclusions -✓✓Typical Exclusions
1. Failure to harvest a mature crop
2. "Unit normal visible stand" (i.e. crop must be up to be covered)
3. "Before effective hour" (i.e. damage prior to start of policy)
4. Crops that can be recovered by harvesting
5. Crop not owned by the insured (e.g. share crops)
6. Damage to trees, bushes, fruit, or nut crops
7. Damage to leaves or plants, unless affecting the actual crop
For example, failure to harvest a mature crop is excluded. This makes
sense, since it is avoidable neglect on the part of the farmer.
Another exclusion is called "Unit normal visible stand," which
essentially means that the crop must be up in order to be covered.
Damage will not be covered if it occurs "Before effective hour," or in
plain
English, before the policy starts. And, if any part of the damaged crop
can be recovered by harvesting, it will be excluded from coverage as
well.
The policy also excludes share crops and other crops that the insured
does not own, as well as damage to trees, bushes, fruit, or nut crops.
Finally,
losses caused by damage to leaves or other parts of the plant are not
covered, unless they affect the actual crop.
