PRF Insurance In Iowa

Pasture, Rangeland, and Forage (PRF) insurance is a type of crop insurance designed for livestock producers in Iowa and the rest of the contiguous United States. 

It provides coverage against losses caused by rainfall deficiency and its consequential forage loss.

What is PRF Insurance?

The PRF insurance program is a USDA-subsidized insurance program that enables livestock producers to protect their bottom line from the financial impact of forage loss caused by a lack of rainfall.  

Insured ranchers receive cash indemnities when rainfall in their area falls below the 70-year historic average during their coverage intervals. 

How Does PRF Insurance Work?

PRF insurance enables ranchers to protect their profit margin from the effects of forage loss caused by insufficient rainfall. Indemnity amounts are calculated based on the direct correlation between below-average rainfall and decreased forage production. 

Here’s a breakdown of how your policy will trigger indemnities: 

1. Four NOAA rainfall stations closest to the center of your insured grid(s) will collect rainfall data throughout your insured intervals (2-month time-frames)
2. NOAA determines your grids’ rainfall total during a specified interval and reports their findings to the USDA
3. The USDA determines if an indemnity check is owed to you based on your policy’s coverage level and the percentage of normal rainfall that your insured grid(s) received 
4. If you’ve received less rainfall than your chosen coverage level (70-90% of normal), then an indemnity will be credited to your policy. 

*Remember: Indemnities go toward your premium first. Once it is paid in full, indemnities will be issued directly to you. 

Is PRF Insurance Worth It?

PRF insurance is a risk management tool designed to protect ranchers from financial losses due to insufficient rainfall. The question of whether PRF insurance is worth it depends on your individual circumstances. Ranchers should consider a few factors, such as the likelihood of dry conditions, the financial impact of a loss, and the cost of the insurance premium.

For ranchers in regions prone to drought or lower-than-average rainfall, PRF insurance can seem like a no-brainer. However, ranchers in regions that frequently receive a lot of rainfall can also benefit, since the indemnities are issued when your area receives less rainfall than the 70-year average, regardless of whether or not your region is considered to be in active drought. 

What are the Benefits of PRF Insurance?

PRF insurance offers several benefits for ranchers in Iowa:

- Protection against financial losses: ranchers in Iowa can benefit from PRF insurance by having protection against the financial risk associated with below-average rainfall. 

- Flexibility in coverage options: A PRF insurance policy through Redd Summit Advisors is customizable to your needs. Your agent can tailor your policy to maximize your indemnity, minimize your risk of owing a premium, or strike a balance between the two. 

-Automatic Indemnities: If your area receives below-average rainfall during one of your insured intervals, then an indemnity will be automatically credited toward your policy, without you ever having to file a claim or meet with an adjuster. 

- Peace of mind: With PRF insurance, ranchers can focus on running their ranch without constantly worrying about whether they’ll be able to cover the cost of dry conditions.

What Does PRF Insurance Cover?

Pasture, Rangeland, and Forage (PRF) insurance enables producers to protect their profit margin from the financial impact of decreased forage production due to below-average rainfall. Your policy can insure any acreage that you utilize for grazing or forage production, whether owned leased, irrigated, or non-irrigated. 

Does PRF Insurance Cover Drought?

PRF insurance insures producers against the impacts of lower-than-average rainfall, which often implies drought conditions. However, you can benefit from PRF insurance even outside of active drought conditions. With a policy, you’ll be issued an indemnity when rainfall is below average for any of your insured intervals, even if you’re not suffering a true drought. 

Does PRF Insurance Cover Forage Loss?

Yes, PRF insurance does cover forage loss, but it does not require you to measure and report your actual forage yield. Instead, PRF coverage operates based on the direct correlation between low rainfall and decreased forage production. 

Does PRF Insurance Cover Rainfall Deficiency?

Yes, PRF insurance does enable producers to protect their profits from the effects of insufficient rainfall, which is why it is sometimes referred to as “rainfall insurance”. 

How to Purchase PRF Insurance in Iowa?

To sign up for a PRF insurance policy for your Iowa operation, follow these three steps: 

1. Contact a Redd Summit agent by calling (435) 625-1022 or click the “Talk With An Expert” button in the top right corner of this page. 
2. Submit a 5-minute application
3. Lock in your policy for next year!

That’s it! And remember, PRF insurance policies do not require any payment up-front. 

Frequently Asked Questions

1. How can I find the current deadlines for PRF insurance in Iowa?

The deadline to sign up for a 2024 PRF policy is December 1, 2023. 

2. How does the PRF coverage work?

The PRF policy coverage works by providing insurance coverage for perennial pasture, rangeland, or forage used to feed livestock in Iowa and the rest of the contiguous United States. It helps producers manage the risk associated with a lack of rainfall. The coverage is based on a rainfall index, which reflects precipitation relative to the long-term average for a specified area and timeframe.