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January 14, 20260 citationsOpen Access

The Actuarial Performance of Prevented Planting Buy-Up Coverage

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DTDylan TurnerFTFrancis Tsiboe

Key Points

  • This analysis aims to determine if prevented planting buy-up coverage affected the actuarial performance of the crop insurance program.
  • Utilized policy-level data from 2011–2024.
  • Compared buy-up loss ratios to base coverage loss ratios.
  • Analyzed implications of policy changes on indemnity coverage.
  • Buy-up loss ratio was 0.818, lower than base coverage at 0.866.
  • Indicates that premiums for buy-up coverage sufficiently covered additional claims.
  • Findings suggest minimal adverse selection issues with buy-up options.

Abstract

On November 28, 2025, the USDA Risk Management Agency finalized the elimination of the 5% prevented planting (PP) buy-up option. Using policy-level data from 2011–2024, this brief examines whether buy-up coverage historically degraded the actuarial performance of the Federal Crop Insurance Program. While theory suggest that optional PP coverage could lead to adverse selection, national-level results show that buy-up loss ratios (0.818) were lower than base coverage (0.866). These findings suggest that buy-up premiums adequately covered additional indemnities.

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Cite This Study

Turner et al. (2026) studied this question.

synapsesocial.com/papers/696718c687ba607552bb8b61https://doi.org/10.22004/ag.econ.387586
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Prevented Planting Buy-Up Elimination and What the Evidence Indicates about Adoption, Actuarial Performance, and Pre-Planting Risk Management Options for Farmers2026
  2. 2Ending Prevented Planting Buy-Ups Changes Insurance Choices and Expands Program Risk2026
  3. 3What Ending Prevented Planting Buy-Ups Means for Farmers’ Insurance Costs2026
  4. 4Actuarial implications of prevented planting coverage2024 · 4 citations
  5. 5Rate Revisions and Risk Transfer Incentives in Agricultural Insurance2026