Alabama Insurance Adjuster Practice Exam

What is an example of a peril that may be covered under a Crop-Hail insurance policy?

1. Flooding

2. Lightning strikes

3. Agricultural pests

4. Fires

The correct answer is: Fires

A Crop-Hail insurance policy is specifically designed to protect agricultural producers against losses due to certain specified perils that directly affect crops. Fires are indeed one of the potential perils that may be covered under such a policy. When a fire causes damage to crops, it can significantly impact the yield and financial viability of a farming operation, making fire a relevant risk for farmers to insure against. In contrast, flooding is typically addressed under other types of insurance and often requires a separate flood policy. Lightning strikes may be covered under property insurance but are not the primary focus of Crop-Hail policies, which emphasize perils that directly impact growing crops. Agricultural pests are usually managed through integrated pest management practices and may not be covered under standard Crop-Hail policies since they fall under the category of a risk that is often considered a maintenance issue rather than a sudden and accidental peril.