Insuring fruit crops in Hawaii doesn’t involve nearly as many pineapples as you might think.
It’s more about macadamias, pawpaw, and coffee. And it’s pretty unique – customer service is an agent’s lifeblood, because premiums don’t change no matter who insures you.
“Because it is a Federally regulated program, the prices are set, so you can’t go from one agent to another agent and get any discounts. Premium is going to be the same no matter who you use,” said Caren Herrod, from Golden State Crop & Insurance Services.
“Once you acquire that client, it’s all about setting a good impression all the time, not just up front. It’s definitely about the service. To me, it’s a very intriguing program.”
The Multi-Peril Crop Insurance program is authroized by the Risk Management Agency at the USDA. There are 18 private companies authorized to write crop policies, although the RMA determines both what rates can be charged and which crops can be insured.
“While P&C or Ag insurance covers the property and property owner on many different levels, multi-peril crop insurance covers the crop,” Herrord said. “Some policies cover a deficit in harvested production, some cover damage to trees, some cover nursery plants, and some cover losses in farm revenue.
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“Because there isn’t the competition, as far as dollars go … we stay knowledgeable in the crops and what’s going on with growers and any changes on the horizon with rules. We have to be of the best service to our growers.”
Perhaps surprisingly, pineapples – that food most synonymous with Hawaii – don’t have their own crop insurance.
“There is a lot of speculation that the pineapple industry is just ‘too big to fail’,” Herrod explained. “It’s not that they don’t fail. It’s just one of those crops … they’re very hardy, they can withstand extreme swings in temperatures, periods of drought, periods of rain. The chance of loss is still there but the likelihood of a catastrophic loss is very slim. So because of that there hasn’t been the interest in them having their own policy.
“There’s very few companies [growing them] … they require a lot of attention and it’s a big investment. These large companies have hundreds and hundreds and hundreds of acres. A small loss percentage in the big scheme of things doesn’t affect a large corporation the same as it would a small family owned farm.
“That said, there are still coverage options available to pineapple growers, just not in the form of a pineapple specific MPCI policy. [However] a grower may be able to insure their farm revenue, which can include revenue from pineapples, so a pineapple grower still has options available to them.”
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