Review Hail Coverage before March 15

Corn field in a storm

Many producers sign up for hail and wind coverage at the same time they do their other crop insurance. In 2025, it’s going to be even more important to do it that way.

Hail and wind insurance for 2025 will likely get more expensive with fewer options available. Losses due to wind have been substantial, especially in Nebraska and Iowa. Situations around pricing regulation in Nebraska have created bigger problems in the state.

“This insurance is not subsidized by the government and is regulated at the state level” says Tony Jesina, senior vice president of insurance at Farm Credit Services of America/Frontier Farm Credit. In Nebraska, insurance companies have more latitude in how they price wind and hail relative to what is considered actuarily sound pricing.   Companies operating there often price these products in a race to the bottom, hoping to offset losses with good performance on the multi-peril side in a state that’s largely farmed under irrigation. “The last two years brought Nebraska losses on the multi-peril side too,” says Jesina. Last year, insurance companies that wrote multi-peril and hail in Nebraska combined lost more than $700 million.

As a result, some approved insurance providers (AIPs) will start to raise rates and eliminate some underperforming products.

What can you do?

There are some ways to work around this by looking at the big picture of what’s available, knowing your cost of production, and looking at insurance through the lens of data.

Review your base coverage

Start first with your base multi-peril coverage. Can increasing coverage through Revenue Protection, for example offset some of what you might have insured through hail and wind coverage?

Lead with data

To make the best decisions, you need to know your cost of production. Then your FCSAmerica/Frontier Farm Credit insurance officer can help you get to your goals by using a couple pieces of proprietary software that we have. First, Optimum can help you see how you perform relative to the county, determining your fit with area plans like ECO and SCO. For 2025, we’ll have access to a new piece of technology through our collaboration with AgCountry Farm Credit Services. It’s the Hail Plan Analyzer which will determine your remaining gap after MPCI and work on solving that based on your own risk tolerance.

Consider area plans

For 2025 the subsidy for Enhanced Coverage Option (ECO) has increased to 65%. If your farm aligns well with the county in terms of production and losses, this might be a good fit for you. If you tend to get hail in your part of the county while other parts of the county do not, it’s likely not your solution.

Work with an agent that has access to more AIPs

If hail and wind coverage is still your best option, you’re going to do better with an agent that has access to more companies that offer this insurance, as some will be raising rates or eliminating certain products.

Make hail/wind decisions before the MPCI sales closing date

Finally, look at the situation concerning hail and wind before the MPCI sales closing date, as this allows you to shift your strategy if you see that continuing with hail and wind insurance isn’t working for you.