January 5, 2018
U.S. farmers absorb a large expense for the national crop insurance program. In fact, they pay substantially more for this protection than they receive.
According to U.S. Department of Agriculture, in 2015 and 2016 farmers purchased 2,364,338 crop insurance policies. Of those, there were 563,506 claims. More than 1.8 million policies were not triggered.
In other words, seventy-five percent of the policies generated no claims.
In addition, farmers spent $7.2 billion out of their own pockets for insurance protection in 2015 and 2016. They also shouldered $13.6 billion in losses as part of deductibles. Indemnities (payments for claims) totaled $10.2 billion.
Farmers paid out more than $20 billion collectively for crop insurance and for deductibles associated with their policies – nearly twice the total they received for claims.
For more information about the program from National Crop Insurance Services, click here.