Find Your Right Coverage
Mixed Forage Rainfall Claim Calculation
This example demonstrates how a mixed forage rainfall claim is calculated.
A customer has 200 acres of a five-species mixed forage crop they would like to insure.
They can select coverage from options of $50, $100, $200 or $300/acre.
Three monthly precipitation options are available to choose from:
Option 1 - 20/40/40/0
Option 2 - 15/35/35/15
Option 3 - 0/20/40/40
Finally, either a 125 or 150 per cent monthly cap for precipitation must be selected.
| Month | Measured Precipitation (mm) | Normal Precipitation (mm) | % of Normal | Monthly Weighting (%) | Weighted % of Normal |
|---|---|---|---|---|---|
| May Precipitation | 60.0 | 80.0 | 75.0 | 20.0 | 15.0 |
| June Precipitation | 60.0 | 50.0 | 120.0 | 40.0 | 48.0 |
| July Precipitation | 10.0 | 30.0 | 33.3 | 40.0 | 13.3 |
| August Precipitation | 25.0 | 20.0 | - | 0.0 | 0.0 |
| Total | - | - | - | 100 | 76.3% |
Claim Calculation
Customer coverage selected is $200 per acre on 200 acres of mixed forage = $40,000 total coverage
The customer was concerned about early rainfall and selected weighting option 1 and monthly cap of 150 with coverage weighted across the months of May to July as: 20% (May) + 40% (June) + 40% (July) + 0% (Aug)
Payment calculation (shown in table above):
Weighted % of Normal for May = Measured Precipitation / Normal Precipitation x Monthly Weighting
= 60 / 80 = 75% of Normal in May
May weighting = 20%
75% x 20% = 15.0%
Repeat per cent of normal calculation for all months.
The sum of the monthly weighted % of normal = 76.3%
The payment rate for 76.3% of normal is 7.0% (see Payment Schedule)
Total Claim
= total coverage X payment rate
= $40,000 X 7.0%
= $2,800