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A Description of Multiple Peril Crop Insurance - Cont.
The first element in this calculation, the APH yield, is based on the producer's Actual Production History. The APH represents the producer's normal yield, and is based on 4 to 10 prior years of yield information.
The number of acres planted may be estimated by the producer at the time the policy is issued, in order to have an estimate of the premium.. Subsequent to planting, the producer must file a report of the actual acreage planted. Since the acreage is verified at the time of loss, overreporting will not increase the producer's indemnity payment. Underreporting of acreage will result in a penalty because the total value of production on all of the producer's acreage, including any unreported acreage, is compared to the insured liability to determine the indemnity at the time of a loss.
The Coverage Level represents the producer's deductible, with a Coverage Level of 75% meaning that the insurance pays nothing if the loss is less than 25% of the value of the crop. Coverage Levels ranging from 50% to 75% are currently available, with 85% coverage being offered in some counties on a pilot basis.
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