Kansas Crop Insurance Practice Test

The minimum percentage of the established price that Catastrophic (CAT) Crop Insurance pays is 55%. This percentage reflects the standard coverage level that CAT provides to insured farmers when they experience a loss due to natural disasters or other qualifying events. CAT insurance is a frequent choice for farmers because it offers a low-cost way to obtain basic protection. The established price is determined at the beginning of the crop year and is based on various market factors. Under CAT coverage, if a farmer suffers a loss of yield that exceeds the threshold (usually set at 50% of the expected yield), the policy will compensate the farmer at 55% of that established price for the lost production. This means that while it offers essential coverage, it does not fully cover potential losses, prompting some farmers to consider additional coverage options for more comprehensive protection. This percentage is central to understanding the minimum level of risk management provided under CAT. Other choices represent different coverage levels typically found in more extensive policies but do not apply to CAT coverage specifically.