Base Price Modifier for California Tree Nuts

Coverage Exclusions

  • High risk, unrated or uninsurable acreage.
  • WFRP, CAT coverage and ARPI plans.
  • Acreage insured by written agreement.
  • Organically produced crops, unless authorized in writing by us.

Indemnity Calculation Example

The insured will receive an indemnity payment from the BPM policy in addition to the MPCI payment only when a yield loss occurs and the production to count is less than the MPCI production guarantee. The formula for calculating the BPM indemnity is as follows: MPCI production guarantee for the BPM unit minus the MPCI production to count times the BPM price election times the insured’s share.

An almond grower with a 3,000 pound APH approved yield and a 100% share buys 65% APH coverage with an established price of $4.00 per pound. The grower also buys a BPM policy at the maximum price available of $0.50 per pound.

  1. The APH guarantee per pound is 1,950 pounds (3,000 x 65%).
  2. The grower harvests 1,700 pounds per acre, which is 250 pounds per acre below the APH guarantee (1,950 guarantee – 1,700 harvested).
  3. The indemnity payment per acre is as follows:
    • APH Benefit:
      $4.00 x 250 pounds = $1,000 per acre
    • BPM Benefit:
      $0.50 x 250 pounds = $125 per acre
    • Total Benefit:
      $4.05 x 250 pounds = $1,125 per acre

BPM premium is calculated by multiplying the BPM liability by the BPM rate for the crop/county (rounded to the nearest whole dollar).