Box-1: Catastrophe Risk Protection for Farmers in USA
Catastrophic Risk Protection (CAT) in USA
Catastrophe Risk Protection in USA is the lowest level of Multiple Peril Crop Insurance
(MPCI) coverage. Premiums for the CAT portion of all crop insurance policies are fully subsidized by the Federal government, although most farmers will pay an administrative fee for document processing. Farmers with limited resources maybe eligible fora waiver of the administrative fee for CAT coverage. Any crop insurance agent can assist producers in determining if they are eligible fora fee waiver.
CAT is a 50/55 coverage, meaning the losses exceeding 50% are payable @ 55%. In other words, in the event of 100% of loss, CAT cover pays a maximum of 27.5% loss to the farmer (55% of 50% loss).
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