Crop insurance is a contract under which one of the parties (insurance company) pays an indemnity to the other party (insured) in case of the occurrence of a specific event covered by the contract.
- Cost of the Insurance: the contract is effective after the payment of the cost of the insurance, which is named “insurance premium”.
- Adverse climatic event: if a climatic event that is covered in the insurance contract occurs, we name it “claim”. This claim must be assessed in the presence of the insured and/or another nominated party.
- Indemnity: after the assessment of the claim in the field is confirmedby the loss adjusters, and the insured and/or nominated representative, the indemnity will be calculated and paid.
As a reliable, predictable risk management tool, the crop insurance policy protects the rural producer from losses resulting from adverse climatic events, and also promotes the protection of the investments.