Like the crops they cover, federally backed crop insurance products could be viewed as just another commodity.
After all, these products are identical and prices are the same regardless of which company sells them. So what's the point in shopping?
According to William Edwards, Iowa State University professor of agricultural economics, there are still reasons to shop around. One primary difference is the agent who represents the insurance companies.
“I think a lot of people end up going with the company where they buy their other insurance products,” Edwards says. This is certainly a convenient way to take care of crop insurance. But it pays to ask the right questions to make sure the agent is knowledgeable in the intricacies of crop insurance.
Look for an agent who understands all the programs available, says Edwards. “Some agents pick one or two programs they understand well and sell those no matter what. Look for an agent who's willing and able to explain all options available.”
Laurence Crane, director of education and training for National Crop Insurance Services, agrees. He says some agents offer crop insurance, but it's a minor part of their business. “An agent who says, ‘I am only going to focus on two products’ is much different than an agency that knows all the products.”
Edwards also says it's important that the agent understands the connection between marketing and crop insurance. “This is particularly true for farmers who forward price any of their crops,” he points out.
Edwards says the trend has been for insurance agencies to arrange to offer marketing advice in conjunction with insurance coverage, especially with products like crop revenue coverage (CRC) and revenue assurance (RA). It's become increasingly common for banks to offer crop insurance as well, he adds.
Once the agent's competency has been established, the choice then comes down to components such as service, attitude, location and word of mouth, says Crane. “Why do you go to the bank you do? You go to whatever bank meets your needs. It's the same with a crop insurance agent,” he stresses.
For one farmer it may be important that the process be automated over the Internet, while another producer may want the agent to come out to the farm to fill out the paperwork. “It comes down to what each farmer feels most comfortable with,” he adds.
If you simply don't want to deal with an agent at all, crop insurance can be purchased over the Internet, bypassing an agent. Currently, Edwards says, there is no cost benefit to doing this. However, there has been speculation that lower prices may eventually come, since the insurance company's overhead is less.
The table lists companies that sell federally backed products in top corn- and soybean-producing states. Visit their sites through www.rma.usda.gov for localized information.