The 2013 version of the Crop Insurance Decision Tool is now available for download from the FAST section and Crop Insurance section of farmdoc. If projected prices and volatilities are the same as last year, most corn and soybean premiums in Illinois will be lower in 2013 as compared to 2012.
Changes the Risk Management Agency (RMA) made to underlying rates will cause lower premiums over much of Illinois. Some of the rate changes occur because Illinois and many Midwestern states have had low insurance payments relative to total premiums paid for insurance products over time. To correct this, RMA lowered the rates of yield insurance in many Midwestern states.
Concerns have been expressed that 2013 insurance premiums would increase as a result of perceived high losses in 2012. Results from 2012 are not included in 2013 rates as information from the 2012 year was not available at the time 2013 premium rates were set. Information from 2012 will influence rates in 2014.
Overall, crop insurance premiums will be lower in many counties in Illinois if the projected prices and volatilities are at 2012 levels. This suggests that changes in premiums will have little influence on crop insurance choices in 2013.