Private-sector delivery is a key strength of crop insurance because time is of the essence when a major loss occurs. Even during the government shutdown in 2013, the private sector continued to pay indemnities to farmers, ensuring that they recovered from their losses.
Government-run programs of the past were notoriously slow in their ability 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, which is closely tailored to each farmer’s operation and can deliver assistance within weeks of a claim being finalized.
Critics have advocated government takeover of crop insurance delivery, but this approach has been soundly rejected by lawmakers, administration officials and farm leaders time and time again. In fact, the government delivered crop insurance decades ago but tapped the private sector to help in 1981 amid low program participation and high taxpayer cost for farm policy.
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 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 August 2018