Is it Time to Specialize in Crop Insurance?

May 22, 2024

When you think of insurance coverage, what comes to mind? If you’re like most people, you probably think of the most common types of insurance, such as auto insurance, homeowners insurance and life insurance.

Unless you’re a farmer or rancher, or have some other ties to agriculture, you probably don’t think of crop insurance. In fact, you may not even know this type of coverage exists.

Crop insurance is a type of agriculture insurance that farmers, ranchers and other producers can use to protect themselves. Crop insurance is used to protect crops and livestock in cases of natural disaster or loss of revenue.

You don’t have to be a farmer or have an ag background to start selling crop insurance. With the right education and tools, any motivated agent can make the jump to crop insurance sales. Here’s what you need to know if you’re thinking about getting started as a crop insurance agent. 

What Types of Crop Insurance Are There?

There are a few different kinds of crop insurance: Crop-Hail insurance, Federal Crop insurance and Livestock insurance. Crop-hail coverage offers the protection you would expect from its name — it insures farmers against losses they might face if their crops are damaged by hail.

Farmers utilize federal crop insurance to meet their protection needs for planting. It covers losses and lower yields from natural disasters and events like destructive weather, excessive moisture, drought, fire, freezing, flooding, disease and insect damage. The cost of the insurance depends on the value of the crop. Not all crops are covered in every area.

Farmers can combine crop insurance with yield protection and price protection to help shield themselves from revenue losses that could come from low yields or changes in market prices.

Crop insurance may also cover livestock through Dairy Revenue Protection, Livestock Risk Protection and Livestock Gross Margin Protection. Livestock markets change fast and it’s important that client/members have the coverage they need and an agent there to support them. 

The History of Crop Insurance

Private crop insurance sales began in the United States around 1880, when it was offered to farmers so they could protect themselves against losses from hail damage. The Federal Crop Insurance Program began in the 1930s.

Crop insurance has become a crucial part of coverage for farmers. In 1981, the Federal Crop Insurance Program insured only 45 million acres and $6 billion worth of crops. In 2022, 1.2 million policies protected more than 100 crops, mainly corn, soybeans, wheat and cotton, across 493 million acres.

And that same year, farmers spent almost $1.4 billion on crop-hail insurance to protect $46 billion worth of crops.

A 2023 USDA Economic Research Service estimate indicates that more than 80% of planted acres — 444 million acres — had crop insurance coverage. 

What Is a Crop Insurance Agent?

Crop insurance agents sell policies to farmers, ranchers and others in the agricultural field who need coverage. Crop insurance agents need skills and knowledge beyond that of a typical insurance salesperson.

To help their clients get the coverage they need and to guide them through their choices, crop insurance agents need at least a basic knowledge of crops and farming/ranching practices. They also need strong risk-management skills concerning crop production 

What Are the Requirements to Become a Crop Insurance Agent?

Crop insurance agents need a crop-hail and multiple-peril insurance agent license to sell crop insurance policies. Crop insurance licensing requirements vary by state, but in general, you need to have a high school diploma and pass a crop insurance licensing examination. 

How Is Selling Crop Insurance Different Than Other Insurance Sales?

While millions of people need life, home, auto and health insurance, not everyone will need crop insurance.

There may be some travel involved to sell crop insurance. Farms and ranches spread over many acres, and you may have to cover some distances to meet with potential clients and help evaluate their needs firsthand.

You’ll also need to understand this industry.. Perhaps more than any other insurance sector, you need to stay up to date on industry trends, USDA changes and legislative news to protect your clients — and their crops.

That said, selling crop insurance is financially rewarding, and it’s a field where you can make a difference — you’re helping farmers protect their crops and their livelihood. 

How to Get Started as a Crop Insurance Agent

Are you interested in selling crop insurance? Reach out to a Farm Bureau District Manager, who can tell you more about how to get started.