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What Is GRIP? What Are Its Benefits?
The Group Risk Income Protection (GRIP) insurance program is an area-based revenue insurance program that provides insurance protection against widespread loss of revenue in a county. The insured is paid in the event the county revenue falls below the insured’s trigger revenue. Coverage levels are available from 70 to 90% in increments of 5% of the county trigger revenue. Protection per acre is available from 60 to 100% of the county maximum protection per acre listed in the county actuarial (maximum protection per acre equals expected county yield, times the expected price, times 150%). Coverage is expressed as a county revenue trigger (expected county yield times expected price times coverage level). GRIP is similar to GRP except revenue rather than yield is the basis of coverage.
Trigger Revenue (guarantee)
The trigger revenue (guarantee) is the expected county yield (same as the GRP expected yield), times 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), times the level of coverage, times the insured acreage. A Harvest Revenue Option Endorsement is available, which redefines the trigger revenue price as the greater of the base price or the harvest price.
County Revenue (revenue to count)
The county revenue (revenue to count) is the harvest price (the simple average of the final closing daily settlement prices for the trading month on the crop futures contract specified in the crop provisions), times the final county yield for the crop year, times the insured acreage.
Loss Payment
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) times the insured’s protection per acre (60 to 100% of the maximum county protection per acre), times insured acres, times the insured’s ownership share.
Units
The coverage unit is all acreage of the crop in the county.
How It Works without Harvest Revenue Option (soybean illustration)
| Trigger Revenue | 40 Bu./A. × $6.10 × 90% level × 100A. = $21,960 |
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| County Revenue | 25 Bu./A. × $7.93 × 100A .= $19,825 |
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| Revenue Loss | $ 2,135 |
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| Loss Payment | ($2,135 ÷ $21,960) × ($366 × 100%) × 100A. × 100% share = $ 3,550 |
Availability
Crop |
State |
County |
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Corn |
AL, AR, CA, CO, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, MI, MN, MO, MS, NC, ND, NE, NJ, NY, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA , WA, WI, WV, and WY |
All counties where GRP is offered (see actuarials for more information). |
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Cotton |
AL, AR, AZ, CA, FL, GA, LA, MO, MS, NM, NC, OK, SC, TN, and TX |
All counties where GRP is offered (see actuarials for more information). |
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Grain Sorghum |
AR, CO, IL, KS, LA, MO, NE, NM, OK, SD, and TX |
All counties where GRP is offered (see actuarials for more information). |
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Soybeans |
AL, AR, DE, GA, IA, IL, IN, KS, KY, LA, MD, MI, MN, MO, MS, NC, ND, NE, NJ, OH, OK, SC, SD, TN, TX, VA, and WI |
All counties where GRP is offered (see actuarials for more information). |
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Wheat |
AR, CA, CO, DE, GA, IL, IN, KS, KY, MD, MI, MN, MO, MS, MT, NC, ND, NE, NM, OH, OK, SD, TN, TX, UT, and WY |
All counties where GRP is offered (see actuarials for more information). |
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2/15/05, 12/05, 01/06
