South Dakota Crop Insurance Practice Exam

What are the three main parts of a crop-hail policy?

1. Application, general provisions, special provisions

2. Application, coverage limits, claim process

3. Underwriting guidelines, exclusions, premiums

4. General provisions, exclusions, procedures

The correct answer is: Application, general provisions, special provisions

The correct answer identifies the three main components of a crop-hail policy: application, general provisions, and special provisions. The application is critical as it serves as the initial step where the insured provides necessary information about the crops and the coverage desired. This sets the stage for the policy and helps the insurer assess the risk. General provisions contain the standard terms and conditions of the policy, outlining the responsibilities of both the insured and the insurer. This section typically includes details on coverage, premiums, and policy duration, establishing the framework for how the policy operates. Special provisions refer to the specific conditions or additional coverage options that can be tailored based on the unique needs of the insured. This may include variations in coverage specific to certain crops or geographic areas, which are crucial for ensuring that the policy effectively meets the individual farmer's needs. By knowing these three main components, one can better understand how crop-hail insurance policies are structured and function.