Download Rain on Hay Protection

Rain on Hay Protection
Help Guide
overview
WeatherBill Rain on Hay Protection protects growers against rain damage to cut hay by paying each time rainfall
exceeds the specified thresholds. Because a severe storm later in the period will do more damage than a light rain
early in the period, the coverage can be adjusted to pay out more based on severity and timing of rain.
YOU CHOOSE:
1. The location where rainfall will be measured
2. The dates over which rain events are counted
3. The length of a rain event
4. Payment based on storm severity
5. The maximum coverage per acre
6. The number of acres covered
At the end of the coverage period, Rain on Hay Protection pays out automatically based on the number and severity
of rain events. You get paid quickly, with no claims process, proof of loss or additional paperwork required.
Questions? Email [email protected] or call 888-924-7475 | Fax contracts to: 877-269-1530
© 2010 WeatherBill, Inc. All rights reserved.
WeatherBill sells commodity option contracts, not insurance policies. WeatherBill is not an insurance company.
Coverage Applications
Rain on Hay Protection can be customized to reduce risk for both the commercial hay grower looking to sell his
crop and the small hay grower cultivating his crop for his own use.
1. Income Protection for Commercial Hay Growers:
Commercial hay growers rely on premium prices for high-quality hay, and can suffer crippling losses if rain
reduces their crop to feeder-quality. Rain on Hay Protection provides income security by covering the shortfall in
value between premium and feeder hay. Commercial hay growers should set their max coverage per acre to their
potential loss if their hay falls in value - ensuring that if heavy or persistent rain occurs during their harvest period
their coverage will cover their losses.
2. Cost Coverage for Small Hay Growers:
While small hay growers do not generally sell their hay, their costs can soar if a rainy harvest season lowers
the nutritional quality of their hay, forcing them to buy supplemental feed for their animals. By setting the max
coverage per acre to their expected costs if the must purchase feed to replace their ruined hay, these growers
can ensure that unexpected costs do not eat in to their profits. Since small hay growers have relatively short
harvest schedules where the value of hay in the field does not scale up significantly over time, they can generally
quote coverage with a flat payout structure.
Questions? Email [email protected] or call 888-924-7475 | Fax contracts
to: 877-269-1530
© 2010 WeatherBill, Inc. All rights reserved.
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Key Terms
Location
To begin quoting, enter your location details into the “Location” text box and click the “Locate” button. You can
enter city, city and state, county, county and state, zip code, or latitude and longitude to find your location. Once
a grid has been selected, you can choose a different grid by clicking and dragging the map to your desired location
and clicking on a new grid.
Dates
Start Date:
The date from which you want to begin coverage. This should be near your estimated first day of cutting. For
commercial hay growers the start date should often be several days after the first date of cutting, to ensure
covering the peak risk period.
End Date:
The date on which coverage ends. This should be near your last estimated date of baling. For commercial hay
growers this should often be several days before this date, to ensure covering the peak risk period.
Rainfall
Rain Event Length:
The number of days used to determine if the Rain Threshold was exceeded.
Rain Threshold:
The amount of rain that will trigger a payout.
$/acre per Rain Event:
The payout amount for each rainfall event. If your risk is greater towards the end of the coverage period, you
can specify different payout amounts the 1st day of the coverage period vs. the last day of the coverage period.
Payouts for events in between will scale between these two values
Questions? Email [email protected] or call 888-924-7475 | Fax contracts
to: 877-269-1530
© 2010 WeatherBill, Inc. All rights reserved.
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Key Terms
Coverage:
Maximum Coverage per acre ($):
The highest total amount that can be paid per acre. This should match the total amount of risk to be covered.
Deductible:
The percentage of the Maximum Coverage per acre that must be reached before coverage will pay out.
Number of Acres:
The total acreage you would like to protect. By entering a total number of acres your quote will include a total
premium and total coverage amount in addition to a per acre premium and per acre coverage amount. If no value
is entered, one acre is used as a default.
Questions? Email [email protected] or call 888-924-7475 | Fax contracts
to: 877-269-1530
© 2010 WeatherBill, Inc. All rights reserved.
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Frequently Asked Questions
Do I need to submit any acreage reports?
No. There is no need to submit any paperwork for the number of acres planted. The coverage payout amount is
determined by whether the rainfall amounts in your coverage period. At the end of the coverage period payment is
made automatically with no need for additional adjustment or paperwork.
How will you know if there was actually damage to my hay on a given day?
Because the coverage is based on rainfall amounts at your specified location, there is no verification of how much
damage was done on each day. Based on the rainfall amounts during the coverage period, the coverage calculates
your payout according to the severity and timing of rainfall.
Why do you measure rainfall using National Weather Service grids?
Rainfall can occur over distinct areas of your property over different times throughout your cutting and baling
period. By measuring rainfall over a specified grid, we are able to more accurately represent the total rainfall risk
over all of your acres. This is ideal for agricultural use when compared to relying on a single weather station which
can fail to capture rainfall events over all of your acres. Rainfall values are reported each day for each grid by the
National Weather Service using all of the surrounding weather data (ground weather stations, satellite and radar
readings) to create a daily value for each grid.
Should I pick a Rain Event Length of 1 day or 2 days?
The Rain Event Length variable lets you choose whether rainfall will be measured on each single day in you
coverage period or over any consecutive two-day period. If you are protecting against any small rainfall event,
you can use a 1 day Rain Event Length and set your lowest Rainfall Threshold to .1”. If you are concerned about
damage from slightly larger rainfall, you can use a 2 consecutive day Rain Event Length and a .25” Rainfall
Threshold. The 2 day Rain Event Length has the benefit of calculating storms that may occur over many hours (and
cross over multiple 24 hour measurement periods) as one single event.
Why would I want payouts to be greater at the end of the coverage period? What values should I choose?
There are two factors that lead to there being greater risk towards the end of the coverage period. First, if the
cutting process takes several days or more, there is more hay laying in the field on each day, and therefore greater
risk. Second, the day after hay is cut the damage from rainfall is low compared to the damage done by the same
rainfall 4-5 days after cutting. If you are cutting all of your hay in one day and feel that your risk of rain damage
doesn’t change significantly over the coverage period, you will want to set the Start Date payout amount and the
End Date payout amount to the same value.
Questions? Email [email protected] or call 888-924-7475 | Fax contracts
to: 877-269-1530
© 2010 WeatherBill, Inc. All rights reserved.
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Frequently Asked Questions
How are premiums calculated?
Premiums are calculated largely on the likelihood of loss. If the coverage you are pricing would have resulted in a
loss only once in the last ten years it will be less expensive than coverage that would have resulted in a loss in 8 of
the past 10 years.
If you have priced coverage that seems expensive given your financial risk, examine the historical payouts. Is the
contract showing that it would have paid out in years when you did not have a loss? If so, try adjusting elements
of the coverage such as the rainfall thresholds and the deductible until it only shows payouts in problem years. If
you want help building ideal coverage, please contact your agent or WeatherBill representative.
Questions? Email [email protected] or call 888-924-7475 | Fax contracts
to: 877-269-1530
© 2010 WeatherBill, Inc. All rights reserved.
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