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Crop Insurance Indemnity Calculator

Enter your yield history, coverage, actual yield, price, and acres to estimate the payout.

How it is calculated

The tool models a simple yield-protection payout. First the guaranteed yield per acre: guarantee = APH × coverage ÷ 100, where APH is the approved (historical average) yield and coverage is a percentage such as 75. The shortfall is max(0, guarantee − actual yield), in the same yield unit per acre (bushels, tons and so on). The payout per acre is shortfall × price and the total is per acre × insured acres. If the actual yield is at or above the guarantee, the shortfall and the indemnity are zero. All five fields are required and none may be negative. Coverage above 100 gives no result; check the level against your policy. Deductibles, premiums, price changes during the season and unit rules are not modelled, and real policies differ by programme and crop, so treat the result as an estimate.

Worked example

A farmer has an approved yield (APH) of 180 per acre and 75% coverage, so the guarantee is 180 × 75 ÷ 100 = 135.00 per acre. The harvest comes in at 120 per acre, a shortfall of 135 − 120 = 15.00 per acre. At a price of 4.50 per unit that is 15 × 4.50 = $67.50 per acre. Over 200 insured acres the indemnity is 67.50 × 200 = $13,500.00. Had the harvest reached 150 per acre, it would be above the guarantee and the payout would be $0.00.

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Common mistakes

  • Entering coverage as a decimal (0.75) instead of a percentage (75). The tool divides by 100, so 0.75 means 0.75% coverage; with an APH of 180 the guarantee drops to 1.35 per acre and nothing is paid.
  • Comparing the actual yield with the approved yield instead of with the guarantee. Only a harvest below APH × coverage pays out, so a harvest 10% under APH with 75% coverage pays nothing.
  • Mixing units, such as an APH in bushels per acre and an actual yield as the field's total bushels. Both yields must be per acre.
  • Using the market price you hope to get instead of the projected price your policy uses, which is set by the policy terms and may differ from the cash price.
  • Treating the indemnity as net gain. Premiums, deductibles and any unit-level calculation under your policy are not included.

Sources

About this calculator

A crop insurance indemnity payout is triggered when actual yield falls short of a guaranteed level: guaranteed yield = approved (historical) yield × coverage level, and if actual yield comes in below that guarantee, the indemnity = (guaranteed yield − actual yield) × price × insured acres. No shortfall means no payout.

Farmers enrolled in yield-based policies like the US Federal Crop Insurance Program's APH or YP plans use this to estimate what they'd receive after a drought, flood, or pest loss before filing a claim, and crop insurance agents use the same math to explain coverage levels and set expectations with policyholders ahead of harvest.

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