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The private insurance companies pay farmers for losses from the premiums they receive, when losses are larger than farmer-paid premiums, but taxpayers foot some of the bill for the additional payments. As losses mount, the share paid by taxpayers increases.

There are major two types of crop-insurances, namely, yield-based crop insurance policies, and revenue insurance policies.

The Pradhan Mantri Fasal Bima Yojna was launched on 18th February 2016 by Prime Minister Shri Narendra Modi. 21 states implemented the scheme in Kharif 2016 whereas 23 states and 2 UTs have implemented the scheme in Rabi 2016-17.

The scheme is compulsory for loanee farmer obtaining Crop Loan /KCC account for notified crops. However, voluntary for Other/non loanee farmers who have insurable interest in the insured crop(s).

Federal law limits the authority for Federal Crop Insurance to insure individual farm yields at 85 percent coverage levels. If you need higher coverage levels for your farm, then ECO can offer coverage up to 95 percent, at a county level to enhance your total coverage.

How the claims are calculated: Yield shortfall multiplied by indemnity price. Indemnities are paid when the harvested and appraised production falls short of the unit guarantee.

Claims under crop insurance are done on the basis of localised losses, post-harvest loss, mid-season calamity and wide spread calamities. Hence, the pay-out will be calculated taking factors like weather and yield per hectare.

Coverage of Farmers The non-loanee farmers are required to submit necessary documentary evidence of land records prevailing in the State (Records of Right (RoR), Land possession Certificate (LPC) etc.) and/ or applicable contract/ agreement details/ other documents notified/ permitted by concerned State Govt.