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The Diversification Option is available for crops and varieties that are not insurable under core multi-peril Crop Insurance. Crops like red clover for seed, borage, rye grass for seed, hemp and millet for seed are insurable under Diversification. To be eligible for this option, you must also have insured acres of traditional grains, oilseeds or pulses in the core multi-peril program.

Coverage levels, premiums and any claims paid for the crop grown under the Diversification Option are equal to the average coverage, premium and claims paid for your insured multi-peril acres. A maximum of 30 per cent of total acres insured under the grains program can be included under the Diversification Option.

Diversified crops that fail to establish by June 20 due to insurable causes may be eligible for a Diversification Establishment Benefit. A minimum of 10 acres or 10 per cent of the total acres seeded to the insurable diversified crop must have failed to establish to receive a benefit of $20 per acre.

If your diversified crop has failed to adequately establish or has suffered damage before June 20, contact your customer service office. Eligibility for the Diversification Establishment Benefit will be determined by a Crop Insurance adjuster. Insurance may be purchased on the reseeded acres even if the crop was not previously selected. If the reseeded crop was previously selected, those acres will continue to be insured. To be eligible for insurance, reseeded crops must abide by Crop Insurance's seeding deadlines.

Example

You insure 1,000 acres of wheat and canola.

1,000 (total insured acres) x 30% (eligible for diversification coverage) = 300 eligible diversification acres.

With your eligible 300 acres, you decide to grow 200 acres of buckwheat and 100 acres of dill.

Premium Calculation
The total premium for 1,000 insured acres is $5,000

Average premium = $5,000 ÷ 1000 acres = $5/acre
You pay the average premium for your diversified acres.

300 diversified acres x $5/acre = $1,500 diversification premium

Total premium = $5,000 + $1,500 = $6,500 total premium

Establishment Benefit Calculation
Of your 300 diversified acres, 100 do not establish. If the adjuster determines that the acres did not establish, the indemnity is calculated as:

100 acres x $20/acre = $2,000

Indemnity Calculation (in the event of the establishment claim above):
At the end of the year, you have a $30,000 claim on canola but no claim on your wheat.

Average indemnity = $30,000 ÷ 1,000 insured acres = $30/acre

You received a Diversification Establishment Benefit on 100 acres and did not reseed. Therefore, the indemnity will be paid on the remaining 200 diversified acres that were taken to harvest.

200 remaining diversified acres x $30/acre = $6,000 indemnity

Indemnity Calculation (in the event of no establishment claim):
You receive a $30,000 claim on canola but no indemnity on your wheat; therefore, the average indemnity is:

$30,000 indemnity ÷ 1,000 acres = $30/acre

300 diversified acres x $30/acre = $9,000 indemnity


©Saskatchewan Crop Insurance, Box 3000 Melville, Saskatchewan, Canada, S0A 2P0 Phone: (306) 728-7200 or 1-888-935-0000
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This page last modified 02/22/08