Pecan Tree

• Wind (e.g., tornado, tropical storm, hurricane);
• Freeze damage;
• Freezing rain (ice damage);
• Drought resulting in dying or death of trees if allowed by the Special Provisions;
• Flood;
• Fire; and
• Failure of the irrigation water supply if due to another insurable cause of loss or salt in water supply.

Your amount of insurance is based on the tree reference price applicable to each different stage of your insurable trees for each type.

Trees are also grouped into types and stages to establish the tree reference price used to determine your insurance coverage. The types vary by state. There are three different stages a tree can fall under based on its trunk diameter. If at least 75 percent of the trees in a block fall within the same stage, the entire block may be considered the same stage.

If the trees are pruned or dehorned, the stages may be reduced in accordance with the Crop Provisions.

The guarantee for each insured type is based on the tree reference price, multiplied by the number of trees in each stage, multiplied by the price election percentage you elect for each type. These results are totaled for each stage and multiplied by the coverage level.

You will select one coverage level, ranging from 50-75 percent and one percentage of price election up to 100 percent of the tree reference price for each type insured in the county. Higher coverage levels are subsidized at lower rates and the premium subsidy is at least 55 percent of the premium. Premium and administrative fees are due annually.

Enterprise Units - Are generally, all insured crop acreage in a county. Acreage must meet minimum qualifications. Premium discounts apply.

Basic Units - Include all of your insurable pecan acreage in the county by share arrangement. Premium discounts apply.

Optional Units - May be elected if minimum qualifications are met. You may qualify for optional units if you have pecan groves on two or more parcels of noncontiguous land or you have pecan groves on contiguous land separated by the minimum distance specified in the Special Provisions. Premium discounts do not apply.

There are two forms of optional coverage that are available to purchase in conjunction with your pecan tree policy. Both require you to elect a coverage level above the CAT level (50 percent coverage level at 55 percent of the price election) and both are available in exchange for an additional premium.

If you elect the Occurrence Loss Option (OLO), your guarantee will be calculated the same as it would otherwise be calculated under the base policy. However, the OLO allows indemnities to be paid on smaller losses if a minimum of loss (10 percent) is exceeded.

If you elect the Comprehensive Tree Value Endorsement (CTVE), an additional amount of insurance will be calculated to provide coverage against a future production shortfall, resulting when trees are fully damaged or destroyed. The CTVE guarantee is calculated using a value published in the actuarial documents, or you may elect to use your own actual sales records. The CTVE is only available for trees greater than six inches in diameter. Upon approval of a claim, you will be paid 50 percent of the indemnity due under the CTVE, and the remainder of your indemnity will be paid upon verification that you have replanted trees.

Assume you have chosen a 75 percent coverage level. You have not elected the OLO or CTVE. You have 100 percent share in 3,000 stage 3 pecan trees in the unit. The tree reference price for stage 3 pecan trees is $290 and you elect 100 percent of the price. The unit deductible is $217,500 (3,000 stage 3 trees x $290 per tree x .25). Due to an insured cause of loss, 1,000 trees are destroyed.

The damage value is $290,000 (1,000 trees x 100% damage x 
$290 per tree). The indemnity for the unit is calculated as follows:

  $290,000 Damage Value
- $217,500 Unit Deductible
   $ 72,500 Indemnity