As claims come in from one of the worst droughts in decades, farmers and ranchers across the country are receiving indemnity payments for the losses they have incurred. As of March 25, 2013, more than $16 billion has been sent to farmers.
Nineteen states have loss ratios exceeding 1.05 – meaning that for every $1 paid in premiums, companies are paying out $1.05 in indemnities. Illinois has the highest loss ratio at 3.81.
States with high loss ratios include Missouri, Kentucky, Nebraska, Iowa, Indiana, Kansas, South Dakota, New Mexico, New Hampshire, New York, Wisconsin, Texas, Colorado, Massachusetts, Tennessee, Wyoming, Michigan and Ohio.
Nationally, the loss ratio is 1.44.
In 2012, farmers invested more than $4.1 billion to purchase more than 1.2 million crop insurance policies, protecting 128 different crops. Crop insurance policies protect more than 281 million acres of planted land.
Farmers have spent $28.6 billion out of pocket to purchase the protection of crop insurance in the past decade.