Rainy Days Protection Help Guide
Rainy Days Protection covers loss from frequent rainfall by paying if too many rainy days occur during the coverage period. You choose the location that rainfall is measured and the dates of coverage. You define the rain threshold that defines a rainy day and the number of rainy days that trigger payout. The more rainy days that occur during your coverage period, the greater the payout.
Key Terms
Rain Event Length
The number of days used to determine if the Rain Threshold was exceeded. Select either "1 Day" or "2 Days". If you select 1 Day, the total rainfall over a 24 hour period will need to exceed your Rain Threshold to count as a Rainy Event. If you select 2 Days, then the cumulative rainfall in any two consecutive days in the coverage period that exceed the the Rain Threshold will count as a Rainy Event (the rainfall amount from a single day cannot be counted twice).
Rain Threshold
The amount of rain that if exceeded will define a Rainy Event.
$/acre per Rainy Event
The payout amount for each rainfall event.
Maximum Coverage per acre
The highest total amount that can be paid per acre. This should match the total amount of risk to be covered.
Deductible
The number of rainy days that must be reached before coverage will pay out. If the calculated payout exceeds the Max Coverage Amount, the final payout will be the Max Coverage Amount.
Common Questions
What should I choose for Rainy Event Length?
The Rainy Event Length is the number of consecutive days over which rainfall is measured to determine if a Rainy Event has occurred; you can choose either one or two days. If you choose one day, the coverage will calculate rainfall for each 24 hour period in the coverage period and payout for each day when the cumulative rainfall exceeds the Rain Threshold. If you choose two days, the coverage will calculate rainfall for every two consecutive day stretch in the coverage period, and the coverage will pay out for each two-day period where the combined rainfall exceeds the Rain Threshold.
How does the Deductible work?
The deductible is specified as a number of Rainy Events. This is the number of Rainy Events for which the grower retains the risk. For example, if the coverage period is the month of August, and the Deductible is set to 4, then the first 4 Rain Events would not result in payout but each Rain Event from five onward would pay out. This structure allows the grower to be covered for an unusual number of Rain Events, while reducing the premium by not paying out for every Rain Event (some of which may be a normal and expected and not result in any significant crop yield or quality problem).
Do I need to submit any acreage reports?
No. There is no need to submit any paperwork for the number of acres planted. The coverage payout amount is determined by the rainfall amounts in your coverage period. At the end of the coverage period payment is made automatically with no need for additional adjustment or paperwork.
How will you know if there was actually damage to my crop?
There is no verification of damage. Coverage is based on rainfall amounts at your specified location and payouts are based solely on the official rainfall reports.
Why do you measure rainfall using National Weather Service grids?
Rainfall during your coverage period can vary significantly across all the land you farm. By measuring rainfall over a grid, we are able to more accurately represent the total rainfall risk over all of your acres. This is ideal for agricultural use when compared to relying on a single weather station which can fail to capture rainfall events over all of your acres. Rainfall values are reported each day for each grid by the National Weather Service using all of the surrounding weather data (ground weather stations, satellite and radar readings) to create a daily value for each grid.
Should I pick a Rain Event Length of 1 day or 2 days?
The Rain Event Length variable lets you choose whether Rain Events will be defined by 24 or 48 hour rainfall totals. The 2 day Rain Event Length has the benefit of aggregating all rainfall from back-to-back rain events that cross over multiple 24 hour measurement periods into a single event.
How are premiums calculated?
Premiums are calculated largely on the likelihood of loss. If the coverage you are pricing would have resulted in a loss only once in the last ten years it will be less expensive than coverage that would have resulted in a loss in 8 of the past 10 years.
If you have priced coverage that seems expensive given your financial risk, examine the historical payouts. Is the contract showing that it would have paid out in years when you did not have a loss? If so, try adjusting elements of the coverage such as the rainfall thresholds and the deductible until it only shows payouts in problem years. If you want help building ideal coverage, please contact your agent or Climate Corp representative.
Examples
If you specify:
- Location: Lubbock, TX
- Start Date: 6/1/2010
- End Date: 6/21/2010
- Rainy Event Length: 1 day
- Rain Threshold: 0.25"
- $ per Rainy Event / Acre: $25
- Max Coverage per acre: $100
- Deductible: 4 events
- Number of Acres: 100
And there were 7 days in between 6/1/2010 and 6/21/2010 with rainfall equal to or greater than 0.25"
Then the coverage would pay out (7 rainy events - 4 deductible events) = 3 Events
3 Events * $25 per Event = $75 per acre
If the total payout amount exceeded $100 per acre, the payout would be capped at $100, as that was specified as the Max Coverage per acre.