What type of insurance protects a whole county or area rather than individual farmers?

• A. Group Risk Income Protection
• B. Individual Crop Insurance
• C. Multi-Peril Crop Insurance
• D. Yield Protection Insurance

Answer: (A)

The concept of Group Risk Income Protection is designed specifically to cover a larger geographic area, such as a county or region, rather than focusing on individual policyholders. This type of insurance provides coverage based on the overall yield of crops in a designated area. Instead of assessing losses at the individual farm level, it evaluates if the county's average yield for a specific crop drops below a predetermined level, thus allowing for collective protection against widespread agricultural risks.

This type of insurance can be particularly beneficial for farmers in a specific area as it helps mitigate risks associated with natural disasters, drought, or other perils that might affect an entire region simultaneously. The collective nature means that farmers pay lower premiums compared to individual policies since they are grouping their risk with others in a similar situation. This is essential for supporting the agricultural economy in times of widespread loss.

In contrast, Individual Crop Insurance, Multi-Peril Crop Insurance, and Yield Protection Insurance focus on the specifics of individual farms or the specific yield risk to individual crops, which do not provide the broader protective umbrella that Group Risk Income Protection does for an entire county or area.