Private-sector delivery is a key strength of crop insurance because time is of the essence when a major loss occurs and farmers need money to meet financial obligations.
Government ad hoc disaster programs are notoriously slow in getting Congressional approval and then gearing up to deliver payments to farmers, often taking as long as 18 months to two years after a disaster for help to finally arrive. Crop insurance, on the other hand, is a highly dynamic program that is closely tailored to each farmer’s operation and generally delivers assistance within 30 days of a claim being finalized.
Some critics have advocated the government take over delivery of Federal crop insurance, but this approach has been soundly rejected by lawmakers, administration officials and farm leaders time and time again. In fact, the government did originally deliver crop insurance, but in 1981 looked to the private sector to help deliver crop insurance amid low program participation and high taxpayer cost for ongoing ad hoc disaster programs.
Today, the private-sector crop insurance companies employ more than 20,000 licensed agents, certified loss adjusters and company staff who sell policies to farmers, adjust and determine the extent of losses, collect premiums, and pay claims. Furthermore, companies invest heavily in technology, infrastructure efficiency, training programs, and service improvements for farmers and ranchers.
* Updated April 2020