Factors Affecting Crop Insurance Purchase Decisions in Northern Illinois

When making crop insurance purchase decisions, farmers must consider multiple factors. This paper examines such factors through the use of a survey conducted in a 42 county region of Northern Illinois during 2005. Participants were asked who most influenced their crop insurance purchase decision and if the availability of a Premium Discount Plan (PDP) affected their decision. Respondents indicated that they generally made crop insurance purchase decisions independently, and that the availability of a PDP influenced about 25% of the decisions made. Questions about the importance of ten specific purchase factors were also asked in two distinct groups of five factors each. In one group of factors, price of the insurance was found to be more important than the probability of receiving a claim payment. The other group of factors revealed that government subsidization of premium and weather concerns were highly important to survey participants. Results have also been summarized according to the risk attitude of respondents. Crop insurance participation, plan and coverage level, and other demographic data were collected as well. Further analysis will be conducted to determine relationships between purchase decision factors and the characteristics of the respondents.Risk and Uncertainty,

Crop Insurance Purchase Decisions: A Study of Northern Illinois Farmers

When selecting crop insurance coverage, farmers must consider multiple factors. The importance associated with factors that are considered when making crop insurance decisions varies among individual farmers. As available crop insurance options increase, selecting the appropriate coverage becomes a more complicated process. The prevalence of crop insurance participation and the existence of multiple selection criteria also makes understanding participant decisions more difficult. This paper provides findings of a mail survey conducted among farmers in northern Illinois. Mainly, this paper examines factors influencing farmers’ crop insurance purchase decisions, types of coverage purchased, and farmers’ risk attitudes.Crop Production/Industries,

Factors Affecting Crop Insurance Purchase Decisions in Northern Illinois

When making crop insurance purchase decisions, farmers must consider multiple factors. This paper examines such factors through the use of a survey conducted in a 42 county region of Northern Illinois during 2005. Participants were asked who most influenced their crop insurance purchase decision and if the availability of a Premium Discount Plan (PDP) affected their decision. Respondents indicated that they generally made crop insurance purchase decisions independently, and that the availability of a PDP influenced about 25% of the decisions made. Questions about the importance of ten specific purchase factors were also asked in two distinct groups of five factors each. In one group of factors, price of the insurance was found to be more important than the probability of receiving a claim payment. The other group of factors revealed that government subsidization of premium and weather concerns were highly important to survey participants. Results have also been summarized according to the risk attitude of respondents. Crop insurance participation, plan and coverage level, and other demographic data were collected as well. Further analysis will be conducted to determine relationships between purchase decision factors and the characteristics of the respondents

Crop Insurance Purchase Decisions: A Study of Northern Illinois Farmers

When selecting crop insurance coverage, farmers must consider multiple factors. The importance associated with factors that are considered when making crop insurance decisions varies among individual farmers. As available crop insurance options increase, selecting the appropriate coverage becomes a more complicated process. The prevalence of crop insurance participation and the existence of multiple selection criteria also makes understanding participant decisions more difficult. This paper provides findings of a mail survey conducted among farmers in northern Illinois. Mainly, this paper examines factors influencing farmers’ crop insurance purchase decisions, types of coverage purchased, and farmers’ risk attitudes