South Dakota Crop Insurance Practice Exam

When a loss exceeds 70% on any acre of the insured crop, what additional amount is paid?

1. 1/3 of the percent of loss over 70%

2. 1/4 of the percent of loss over 70%

3. 1/2 of the percent of loss that is in excess of 70%

4. 1/10 of the percent of loss over 70%

The correct answer is: 1/2 of the percent of loss that is in excess of 70%

When a loss exceeds 70% on any acre of the insured crop, the policy stipulates that the insured will receive an additional payment that compensates for the severity of the loss. This is calculated as one-half of the percent of loss that exceeds the 70% threshold. In the context of crop insurance, this provision serves as a safety net for farmers facing significant losses, ensuring that they receive additional compensation when losses are particularly severe. This policy component aims to provide some financial relief beyond the normal coverage for insured losses, reflecting the greater risk and impact on the farmer's ability to recover. The other options do not align with the established insurance payout structure, which is specifically designed to provide the stated additional compensation for losses that exceed the 70% loss threshold. Each of those options would imply a different multiplier, which does not match the correct provision as outlined in crop insurance policies.