The Group Risk Income Protection (GRIP) plan of coverage is an area-based revenue insurance program that provides insurance protection against widespread loss of revenue in a county.
The insured is paid when the county revenue falls below the insured’s selected trigger revenue.
Coverage levels are available from 70% to 90%, in 5% increments, of the county trigger revenue. Protection per acre is available from 60% to 100% of the county maximum protection per acre (expected county yield, multiplied by expected price and 150%).
Coverage is expressed as a county revenue trigger (expected county yield, multiplied by the expected price and coverage level.
The trigger revenue (guarantee) is the expected county yield (same as the GRP expected yield), multiplied by the expected price (the simple average of the daily settlement prices for the trading month on the crop futures contract specified in the crop provisions), level of coverage, and insured acreage.
A Harvest Revenue Option Endorsement is available, which redefines the trigger revenue price as the greater of the expected price or the harvest price (see example below for more details).
The loss payment is calculated by multiplying the payment calculation factor (the trigger revenue minus the insured’s county revenue, divided by the insured’s trigger revenue) by the insured’s protection per acre (60% to 100% of the maximum county protection per acre), insured acres, and the insured’s ownership share.
The coverage unit is all acreage of the crop in the county.
| Without Harvest Revenue Option |
| Trigger Revenue.. | 45 Bu./A. x $6.10/Bu. x 75% level x 100 A..................... ..... | = | $20,588 |
| County Revenue.. | 25 Bu./A. x $7.93 x 100 A .................... ......................... ..... | = | $19,825 |
| Revenue Loss...... | ............................................................... ......................... ..... | $763 | |
| Loss Payment...... | ($763 / $20,588) = 0.037 x ($3661 X 100%) x 100 A. x 100% share.................... |
= | $1,354 |
| With Harvest Revenue Option |
| Trigger Revenue.. | 45 Bu./A. x $7.93/Bu. x 75% level x 100 A............................. | = | $26,764 |
| County Revenue.. | 25 Bu./A. x $7.93 x 100 A ...................................................... | = | $19,825 |
| Revenue Loss...... | ................................................................................................. | $6,939 | |
| Loss Payment...... | ($6,939 / $26,764) = 0.259 x ($3661 x 100%) x 1.302 x 100 A. x 100% share........ |
= | $12,336 |
1County Maximum Protection per Acre = Expected County Yield x Expected Price = Expected County Revenue x 150%
2Policy Protection Adjustment Factor only applies when harvest price exceeds base price (harvest price / base price)
| Crop | State | Counties | Maximum Price Movement |
| Corn | IA, IL, IN, MI, MN, MO, NE, OH, SD, WI | Availability varies by county. See actuarials for more information. |
200% upward No downward limit |
| Cotton | AR, GA, LA, MO, MS, NC, TN, TX | ||
| Grain Sorghum | KS, TX | ||
| Soybeans | IA, IL, IN, MI, MN, MO, NE, OH, SD, WI | ||
| Wheat | AR, CO, IL, IN, KS, KY, MD, MI, MN, MO, MS, MT, NC, ND, NE, OH, OK, SD, TN, TX |
Note: This summary is for general illustration only. See policy for program details.
2/15/05, 12/05, 01/06, 01/10, 3/24/10