When you enrol in Production Insurance, you are guaranteed a level of production based on your yield history and the level of coverage you choose. A claim may be paid if an insured peril causes your yield to fall below your guaranteed production.
Production Insurance covers you for losses due to adverse weather, disease, pests, wildlife, or other uncontrollable natural perils, except for perils excluded in the Contract of Insurance – General Terms and the Commodity-Specific Terms: Tobacco on the Publications page.
Coverage begins May 18 and ends at the completion of harvest. Frost coverage ends at noon on October 1.
Note: Agricorp may extend the coverage period if an insured peril delays harvest.
You must insure 100 per cent of your flue-cured tobacco acres.
Available coverage
The following coverage options are available in addition to regular production loss coverage.
For more information about coverage, see the Contract of Insurance – General Terms and the Commodity-Specific Terms: Tobacco on the Publications page.
Price protection coverage
If an insured peril damages your tobacco and you must sell it at a lower grade, you may be eligible for a payment under price protection coverage. This coverage guarantees up to 95 per cent of the average industry price as determined annually by Agricorp.
Replant coverage
If you have damage to at least three acres, as verified by an Agricorp adjuster, you may be eligible for a payment under replant coverage. You must report damage before replanting.
Salvage coverage
If an insured peril damages your crop between mid-June and mid-September, salvage coverage can help pay the costs of salvaging your crop. There is a basic salvage coverage option, which provides compensation for labour expenses incurred to salvage the crop. In addition to basic salvage coverage, supplementary salvage coverage is available for damage caused by wind or hail only. For more information, see the Commodity-Specific Terms: Tobacco on the Publications page.
Calculating your coverage and claims
Your coverage depends on:
- Average farm yield
- Coverage level
Average farm yield (AFY)
We calculate an AFY to be used as a benchmark to determine if your actual production is below average.
AFY for existing plan participants
Your AFY is calculated using up to the past 10 years of your own reported yields. It is an average of your buffered yields.
AFY for new plan participants
Each crop is assigned an underwritten five-year AFY that is based on a variety of factors such as soil type, drainage, township averages, etc.
Each year that you participate in the plan, your actual yield replaces an underwritten yield until your AFY is composed entirely of your own actual yields.
Yield buffering
Unusually high and low yields are adjusted to stabilize and lessen the impact of extreme yields on your AFY.
- If your actual yield is above the upper threshold (130 per cent of your AFY), the yield is buffered down to the upper threshold.
- If your actual yield is below the lower threshold (70 per cent of your AFY), the yield is buffered up to the lower threshold.
Coverage level
When you apply or renew each year, you choose one coverage level for each crop. It is used to determine your guaranteed production.
Guaranteed production
If an insured peril causes your actual yield to fall below your guaranteed production, a production loss claim may be paid on the difference.
The guaranteed production is based on your AFY (as determined by Agricorp) multiplied by your selected coverage and acreage.
Claim price
The claim price is used to calculate your claim if an insured peril causes your yield to fall below your guaranteed production. The claim price is calculated each year at renewal time.
Overplanted acres
Each year, adjusters do random acreage checks on a small percentage of participants. When a producer has planted more acres than they reported to Agricorp, the number of overplanted acres is deducted from the total acres reported for a claim.
For example, if a producer reports 20 acres, but Agricorp measures 22, two acres would be deducted from the claim for replant or salvage coverage.
