Crop Insurance 101: Determining Units
There are a few steps to complete when creating your multi-peril crop insurance (MPCI) policy. If you have elected to an Individual Plan, the Actual Production History (APH) must be determined. Next, choose the crop insurance unit structure. Unit structure affects premium and how claims are paid.
Each parcel of land that is insured independently of other parcels is called a unit. One farming operation may have several insurance units. Below are the potential unit structure options.
Basic Units (BU)
Unit for all tracts of land owned or cash rented within a county with the same ownership split.
PRO: Lower base cost.
CON: Lower premium subsidy from Risk Management Agency (RMA).
Optional Units (OU)
Unit that divides basic units based on sections.
PRO: Individual coverage per section. If there is a loss in one section and not in another section, you could still receive a claim payment.
CON: Lower premium subsidy from Risk Management Agency (RMA).
Enterprise Units (EU)
Enterprise Units combine all acres of a single crop within a county in which the policyholder has a financial interest. This is regardless of whether it is owned or rented, or how many landlords are involved. Elect separate EUs based on the irrigation practice, cropping practice, or type.
Works best when farms are close together or yields are similar, have only 2 or 3 basic units, price risk is greater than yield risk, and can self-insure small losses.
PRO: Higher premium subsidy from Risk Management Agency (RMA).
CON: Less protection against isolated losses, lower probability of payment each year.
Available for both Yield Protection (YP) and Revenue Protection (RP and RP-HPE) policies.
Multi-County Enterprise Units (MCEU)
Allows a producer to combine acreage of an insured crop, by irrigation practice if applicable, in two contiguous counties in the same state into one enterprise unit.
Whole Farm Unit (WU)
This option combines corn and soybean acres into a single insurance unit per county.
PRO: Higher premium subsidy from Risk Management Agency (RMA).
CON: Less protection against isolated losses, lower probability of payment each year.
Available only for Revenue Protection, both RP and RP-HPE.
Below is a table of the premium subsidy rates by level of coverage and the unit structure chosen.
| Coverage Level | Basic Units | Optional Units | Enterprise Units | Whole Farm Units |
| 50% | 67% | 67% | 80% | 80% |
| 55% | 64% | 64% | 80% | 80% |
| 60% | 64% | 64% | 80% | 80% |
| 65% | 59% | 59% | 80% | 80% |
| 70% | 59% | 59% | 80% | 80% |
| 75% | 55% | 55% | 77% | 80% |
| 80% | 48% | 48% | 68% | 71% |
| 85% | 38% | 38% | 53% | 56% |
To learn more about the insurance products available for farm risk management, reach out to Chelsea Heatherington at Kingsgate Insurance.
Chelsea Heatherington, Farm & Ag Specialist
Call or Text: 515-302-8400
Email: chelsea@kingsgateins.com
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