Because PRF insurance is self-funding, you can start collecting indemnities once any prior indemnities credited toward your policy have satisfied your premium balance in full. However, the timing of when you’ll receive an indemnity check is dependent on 3 main factors.
1. Precipitation Data:
Precipitation data is the driving force behind PRF insurance. Indemnities are credited toward your policy when precipitation in your covered grids is less than your coverage level* during your covered intervals. The lower the precipitation is, the more indemnity will be credited toward your policy, the quicker your premium balance is satisfied, and the faster you can start collecting indemnity checks.
2. Your Covered Intervals:
Producers with coverage applied in the year’s earlier intervals could start collecting their indemnities as early as 60-90 days after the close of the first January-February interval, as long as enough losses (AKA indemnities) were triggered by lack of rainfall to cover their premium balance in full.
3. Your Premium Amount:
Your premium may be higher or lower depending on the coverage selection of your PRF policy. Those with higher premium amounts may end up collecting indemnities later in the year, once their premium amount has been satisfied. It's important to note, though, that a higher premium amount coincides with a higher “dollars of coverage” amount on your policy, and therefore, higher potential indemnity amounts.
*Coverage level is the percentage of average rainfall that your acreage is insured up to (i.e if you are insured up to 90% of average rainfall, then an indemnity will be paid if your grid receives less than 90% of average rainfall during an insured interval).
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