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Corn Rainfall Claim Calculation

This example demonstrates how a Corn Rainfall claim is calculated.

A customer has 200 acres of silage corn they would like to insure.

They can select coverage from options of $150, $175, $250 or $350/acre.

Three monthly precipitation options are available to choose from:
Option 1 - 20/40/40/0
Option 2 - 15/35/35/15
Option 3 - 0/20/40/40

Finally, either a 125 or 150 per cent monthly cap for precipitation must be selected.

           
Month Measured Precipitation (mm) Normal Precipitation (mm) % of Normal Monthly Weighting (%) Weighted % of Normal
May Precipitation 60.0 80.0 75.0 20.0 15.0
June Precipitation 60.0 50.0 120.0 40.0 48.0
July Precipitation 10.0 30.0 33.3 40.0 13.3
August Precipitation 25.0 20.0 - 0.0 0.0
Total - - - 100 76.3%

Claim Calculation

Customer coverage selected is $250 per acre on 200 acres of silage = $50,000 total coverage

The customer was concerned about early rainfall and selected weighting option 1 and monthly cap of 150 with coverage weighted across the months of May to July as: 20% (May) + 40% (June) + 40% (July) + 0% (Aug)


Payment calculation (shown in table above):

Weighted % of Normal for May = Measured Precipitation / Normal Precipitation x Monthly Weighting

= 60 / 80 = 75% of Normal in May

May weighting = 20%
75% x 20% = 15.0%

Repeat per cent of normal calculation for all months.

The sum of the monthly weighted % of normal = 76.3%

The payment rate for 76.3% of normal is 7.0% (see Payment Schedule)

Total Claim

= total coverage X payment rate

= $50,000 X 7.0%

= $3,500