Group Risk Income Protection (GRP)

Group Risk Income Protection (GRIP) coverage is similar to GRP in that it’s based on countywide losses. The difference is that GRIP protects you from a potential loss in revenue resulting from a significant reduction in yields or prices of a specific crop in your county. Instead of the “trigger yield” used for GRP policies, GRIP policies are based on an established “trigger revenue,” also calculated from countywide statistics. If you purchase a GRIP policy and the average revenue for your county fall below your “trigger revenue,” you may be eligible for a loss payment. Purchasing the GRIP Harvest Revenue Option allows the ability to increase the revenue guarantee in the event prices increase in the fall.


Overview

Protection against widespread loss of revenues from the insured crop in a county due to low prices or low yields.

Developed on the basis that when an entire county’s crop revenues are low, most farmers in that county will also have reduced revenues.

You may suffer a personal loss in revenue on your farm, but if countywide revenues are not below the trigger level, no indemnity is due. Your revenue could be higher than the countywide average, but if countywide revenues are below the trigger level, you collect the indemnity.


Benefits

Generally less costly than MPCI coverage or revenue plans.

No paperwork or loss documentation or adjustment needed. Settlements are made based upon the county average yields or calculated revenue.

Production history or evidence of loss is not required because loss payments are based on the county-average yield.


Loss Triggers

Pays when the NASS-calculated county revenues fall below the “trigger revenue” for the covered crop. Indemnity payments are made about five months after harvest.


GRIP Example

Situation: County revenues fall below “trigger revenue.” *
Trigger Revenue: Expected County Revenue x Coverage Level (%) = Trigger Revenue
$271/Acre x 85% = $230/Acre
Policy Protection: Purchased Coverage x # of acres farmed = Policy Protection
$230/Acre x 200 Acres = $46,000
Calculating the Claim:
Trigger Revenue – Final County Revenue = Claim
$230/Acre – $225/Acre = $5/Acre
Payout: Claim ÷ Trigger Revenue x Policy Protection = Payout
$5/Acre ÷ $230/Acre x $46,000 = $1,000

*All examples assume the policyholder has 100% share of the insured crop.


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