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Premium Discount and Surcharges

Premium discounts and surcharges acknowledge risk differences between customers, reducing premiums for customers without a history of repeated claims.

Experience discounts and surcharges are calculated using an individual’s history of losses as compared to area losses. SCIC calculates premium discounts and surcharges by comparing the individual claim to the total net premium, including experience discount, paid by the producer and governments. When an increase in the number or size of losses is experienced, the discount, if present, is reduced or the surcharge is increased. Young farmers taking over family farms can use the experience obtained from the family farm for their own contract. Discounts or surcharges may be transferred directly to the new farmer with at least three years of experience on a previous contract. For young farmers without that experience, the transfer of earned credit would be implemented using partial credits with a three year progression to the full credits of the original contract.

       
Indemnity Discount/Surcharge Comparison to Area Discount/Surcharge
No claim 1.0 credit earned Lowest risk customers - have no claim in a risk area where 70% of customers have received indemnity 2.0 credits earned
Less than or equal to 20% of total net annual premium 0.5 credit earned Low risk customers - have no claim in a risk area where 60% of customers have received indemnity 1.0 credit earned
Greater than 20% but less than or equal to 100% of total net annual premium No Change Average risk customer No Change
Greater than 100% but less than or equal to 200% of total net annual premium 1.0 debit earned High Risk customers - among the next highest 10% of indemnity paid relative to premium among claimants 0.5 debit earned
Greater than 200% of total net annual premium 2.0 debits earned Highest risk customers - among the highest 10% of indemnity paid relative to premium among claimants 1.0 debit earned
       
Accumulated Credits Discount % Accumulated Debits Surcharge %
0 0 0 0
1 5 -1 0
2 6 -2 0
3 8 -3 8
4 11 -4 11
5 15 -5 15
6 20 -6 20
7 26 -7 26
8 33 -8 33
9 40 -9 40
10 to 16 50 -10 to -16 50

Crops excluded from all experience discount and surcharge calculations:

  • camelina
  • dryland beans
  • grain corn
  • honey
  • hemp
  • timothy hay
  • vegetable
  • wild rice

Programs excluded from all experience discount and surcharge calculations:

  • Bee Mortality Program
  • Corn Heat Unit Insurance Program
  • Corn Rainfall Insurance Program
  • Establishment Benefit
  • Forage Diversification Option
  • Forage Rainfall Insurance Program
  • Fruit Tree Insurance Program
  • Gopher Damage claims