Farmers in 13 states will now get the opportunity to reduce the cost of their crop insurance by up to 10%, in an innovative program approved Feb. 17 by USDA.
A company based in Des Moines, Iowa--Crop1 Insurance, Inc.--announced on February 17, 2004 that it has received approval from USDA to offer federal crop insurance to farmers at a discount through the Crop1 Insurance "Premium Discount Plan" (PDP). This is the second year, in which the firm will offer a premium discount to farmers in Iowa, Illinois, Indiana, Kansas, Minnesota, Nebraska, and North Dakota.
USDA also approved on Feb. 17 that the insurance company is available to expand its crop coverage area to include Missouri, Ohio, South Dakota, and Wisconsin.
"Farmers are under pressure to be â€˜low-cost producersâ€™ and so are we. The Premium Discount Plan is designed to pass on our cost savings to the farmer," says Billy Rose, president and CEO of Crop1 Insurance. "At this point, Crop1 is the only company the USDA has approved to offer this savings to farmers."
New plan passes cost savings to farmers
The Crop1 "Premium Discount Plan" (PDP) offers federal crop insurance for five crops â€“ corn, soybeans, wheat, grain sorghum, and sugar beets â€“ with discounts of up to 10% for standard federal crop insurance. These savings are available without reducing the farmerâ€™s existing coverage. In fact, Crop1 has found that many farmers use the savings they offer to buy added protection from Crop1 at the same cost they would pay for lower coverage with other companies.
"We used Crop1 this year and have been favorably impressed with all aspects of their service," says Ron Kielkopf, a southeast Iowa farmer. "The premium discount (with Crop1â€™s PDP) enabled us to increase our coverage level with the same premium dollars. We feel it is very important for the crop insurance structure to be more of a â€˜free enterpriseâ€™ and less of a bureaucracy."
"Last year we found that a farmer with 1,500 acres could save about $1,000 per year," says Robert Boysen, chief operating officer for Crop1. "This year, savings could be even greater as many farmers are finding that their premiums have increased with other companies."
Congress changed the law to allow competition
Crop1â€™s Premium Discount Plan results from a provision passed by Congress that was designed to increase competition. USDA authorized Crop1â€™s Premium Discount Plan due to the fact that Crop1â€™s operating costs are lower than other crop insurance companies.
In part, this is due to the way Crop1 uses the Internet to process information. This allows farmers to access policy information at their convenience, but does not require them to complete the application on-line. Local Crop1 agents and adjusters provide consultation and service.
Cliff Edson, a farmer from Ionia in northeast Iowa, was one of the farmers who wrote to Crop1 regarding local service, saying, "Our local Pioneer seed dealer, who is also a licensed crop insurance agent, serviced the policy and we were able to save substantial money in premiums. The higher cost savings in premiums, the more insurance coverage farmers are willing to buy.
Such competition among insurance companies is good for farmers and itâ€™s the American way of doing things."
As the first crop insurance company approved by USDA to offer farmers a reduction in the premium, Crop1 has established itself as the leader in savings on federal crop insurance.
For more information about Crop1â€™s products, farm clients, and agents contact the company toll-free at 1-866-765-0552. Or online at