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Nursery - Container and Field Grown General Summary
About MPCI Nursery Coverage
The program provides coverage for plants that are container grown, field grown, or both. The plants must be produced by a business enterprise that derives at least 50% of its gross income from the wholesale marketing of plants. Plants are insurable if they are listed on the "Eligible Plant Listing" and meet hardiness zone requirements. Eligible plants may include plants producing edible fruits and nuts, provided the plants are made available for sale (harvest of fruit or nut does not affect the insurability).
You may insure at a Catastrophic (CAT) or Buy-up level for each insured practice (container or field-grown). CAT (50/55) provides coverage at 50% of your insurable plant inventory and 55% of either the lesser of your wholesale price or the price listed on the Plant Price Schedule. Buy-up levels vary from 50-75% (in 5% increments) of your insurable plant inventory at 100% of either the lesser of your wholesale price or the price listed on the Plant Price Schedule. Different coverage levels may be elected for each plant type. Additionally, your crop year deductible also varies with the level that you chose, for example at 65% level, your deductible is 35% (100 minus your coverage level).
Tailored Coverage
Unlike traditional crop insurance policies, the nursery policy allows you to customize coverage to meet your specific risks.
Coverage Level by Plant Type* - Allows the producer to insure each plant type at a different buy-up coverage level according to their needs.
Peak Inventory Endorsement* - Provides coverage for additional values as a result of increases in inventory, for example leading up to holidays, spring sales, etc.; without paying a full year's premium. This endorsement allows you to pay a premium on a declared additional value only for a specified period. The limit on this endorsement is one per crop year, per practice, however, in the event of a loss, you may purchase an additional Peak Season Endorsement above and beyond the limit.
Rehabilitation Endorsement* - This endorsement for field grown plants covers rehabilitation costs, up to 7.5% of the plants' value, including pruning, setup labor and material costs.
Pilot Nursery Grower's Price Endorsement* (2006) - This endorsement allows growers with buy-up coverage to insure specific plants at prices higher than those shown on the Eligible Plant List/Plant Price Schedule. Coverage must be purchased by October 31, 2005 for the 2006 crop year. This endorsement is available in limited areas.
Covered Perils
Covered perils include adverse weather, fire, wildlife, earthquake/volcanic eruption, frost/freeze (if required protection is used), disease/insect (for which there is no effective control), failure of power/irrigation supply (caused by a covered peril), and delay in marketability if such a delay results in the reduction in the value of the plants (due to a covered peril that occurs within the insurance period).
Coverage Period
Insurance begins 30 days after your application is signed by you and ends at 11:59 p.m., May 31. Coverage may end earlier in the event that all plant material is removed from the field or nursery or when total indemnities due equal the amount of insurance. Applications submitted after May 1 will only apply to the next crop year.
Amount of Insurance
Coverage is based on the value reported, times the coverage level elected, times price level (CAT only), times your share. You may increase your insurable value by revising your Plant Inventory Report. Any revision request must be made by May 1 of the current crop year. A 30-day acceptance period applies before the revised coverage attaches. A producer can make up to two revisions per basic unit, per year.
Insurance Units
A unit is the value of the insurable inventory that will be considered for a claim calculation.
CAT coverage - A basic unit will consist of all the insurable plant types in which you have a share in the county for the practice (container grown or field grown).
Buy-up coverage - A basic unit may be divided into additional basic units by plant type, therefore allowing the plant types to be adjusted separately in the event of a loss.
Loss Payment
Indemnities will be determined for any unit by subtracting Field Market Value B1 from Field Market Value A2, multiplying this result by the Under Report Factor3, subtracting the Occurrence Deductible4 from this result, times the price level (CAT only), and times the insured's share. Total indemnities will not exceed the amount of insurance including any peak amount of insurance during the coverage term of the peak inventory endorsement.
Availability
Coverage is available nationwide, however, plant insurability may vary by location. Plants are insurable if they are listed on the “Eligible Plant Listing”, and meet hardiness zone requirements.
How It Works (single unit example)
1. Plant Inventory Value Reported (value by practice—container and field grown): $110,000
2. Amount of Insurance (Reported Value × Coverage Elected × Price Elected × Insured's Share): $110,000 × 75% × 75% × 100% $ 61,875
3. Field Market Value A: $125,000
4. Field Market Value B: $ 80,000
5. Field Market Value C: $125,000
6. Under Report Factor (Reported Value / Field Market Value C): $110,000 / $125,000 .88
7. Crop Year Deductible (25% × $110,000): $ 27,500
8. Occurrence Deductible (Lesser of line 7 or Deductible Percentage × Field Market Value A × Under Report Factor): [$27,500 or (25% × $125,000 × .88)] $ 27,500
Loss Payment (indemnity) {[(Field Market Value A - Field Market Value B) × Under Report Factor]—Occurrence Deductible × Price Elected × Insured's Share}:
{[($125,000 - $80,000) × .88] - $27,500 × 75% × 100%}
$ 9,075
1 Field Market Value B - The value of undamaged insurable plants, based on the lower of prices contained in the eligible plant list/plant price schedule or the nursery's catalog or price list that establishes the value remaining after plant damage. This may include any appraisal for uninsured loss of value.
2 Field Market Value A - The value of undamaged insurable plants, based on the lower of prices contained in the eligible plant list/plant price schedule or the nursery's catalog or price list immediately prior to the occurrence of any loss as determined by appraisal.
3 Under Report Factor - The lesser of 1.000 or the sum of all practice values reported on all plant inventory value reports minus the total of all previous losses divided by field market value A.
4 Occurrence Deductible - The lesser of the deductible percentage multiplied by field market value A multiplied by the under report factor or the remaining crop year deductible.
* Not available at CAT level.
9/30/05
Note: This summary is for general illustration only. See policy for program details.
