Price Modifier PLUS (PM+)

Price Modifier PLUS (PM+)

Protect your bottom line on corn and soybeans with Price Modifier PLUS! Only available in select states.

Quote your PM+ policy in EASYquote® today!

PM+ basics

PM+ allows the insured to supplement their price election on their underlying MPCI policy with the PM+ Price Election. This is a percent of the established price by crop that they select from the company approved limits. What makes PM+ different than our Base Price Modifier (BPM) supplement is that there is also a PM+ Modified MPCI Production Guarantee. Meaning, if the MPCI Harvest Price decreases below the MPCI base price election, the MPCI coverage level will automatically increase equivalently to the percentage of the price decrease up to the selected maximum coverage level. The maximum coverage level is limited to 100% of the unit’s Actual Production History (APH).

PM+ benefits

  • Easy to understand.
  • Accelerated payment with a Harvest Price decrease.
  • Increased coverage on every bushel.

Qualifications and policy details

To apply for PM+, the following policy requirements must be met:

  • The insured must have an active MPCI policy. The MPCI policy is not required to be with NAU Country.
  • The MPCI policy must include eligible plans including Yield Protection (YP), Revenue Protection (RP), and Revenue Protection with the Harvest Price Exclusion (RP-HPE).
  • The active MPCI policy must be written at an 80% or 85% coverage level.
  • The PM+ supplemental policy and price election must be selected at the time of application and will not increase regardless of price fluctuation under the MPCI policy.
  • The PM+ policy is elected on a crop/county basis.
  • The unit structure under this policy will follow the underlying MPCI coverage unit structure of Optional or Enterprise Units, with the option to select Optional PM+ on an Enterprise Unit MPCI Structure.
  • The PM+ policy will begin to pay a loss when the MPCI production to count is less than the PM+ Modified MPCI Production Guarantee. The PM+ policy may pay a loss when there is no production loss on the underlying MPCI policy.
  • PM+ is an annual policy.

Coverage exclusions

PM+ coverage exclusions include:

  • High risk, unclassified, or uninsurable acreage.
  • CAT, ARPI, or WFRP policies.
  • Acreage that is prevented from planting.
  • MPCI coverage that is modified by written agreement (except Written Unit agreement).
  • Second or double crops as defined in the MPCI policy.
  • Organically produced crops.
  • No prevent plant or replant payments are made under the PM+ policy.

Indemnity calculation example

The PM+ payable indemnity is calculated by first determining if the MPCI Harvest Price is lower than the MPCI base price election. If the Harvest Price is lower, calculate the percentage of the price decrease. Then determine the PM+ Modified MPCI Production Guarantee by increasing the production guarantee equivalently to the percentage of the price decrease up to the selected maximum coverage level for the PM+ unit. As a final step, subtract the MPCI production to count from the PM+ Modified Production Guarantee and multiply that result times the PM+ price election, times the insured’s share.

Scenario

An insured with corn at 180 bushel APH and 100% share buys 80% coverage level on a Revenue Protection MPCI Policy with Optional Units. The Projected Price is $4.00. The insured also buys a PM+ policy at the maximum price available of $0.75 per bushel. The insured harvests 120 bushels/acre, and the Harvest Price is $3.55.

In this situation, the original bushel trigger would be 144 bushels/acre guarantee (180 bushels x 80% coverage level). With PM+, the PM+ Modified Production Guarantee (new bushel trigger) is 163.8 bushels/acre. See the calculation below.

  1. Calculate the percent of price decrease and round down.
    • The Harvest Price ($3.55) is lower than the Projected Price ($4.00). 
    • 1 – ($3.55/$4.00) x 100 = 11.3%, 11% price decrease.
  2. Increase production guarantee to the equivalent of the decrease.
    • 80% coverage level + 11% price decrease = 91% new coverage level.
  3. Calculate the PM+ Modified Production Guarantee.
    • 180 bushels x 91% coverage level = 163.8 bushel/acre guarantee.
  4. Calculate the PM+ Indemnity.
    • 163.8 bushels/acre - 120 bushels/acre = 43.8 bushels/acre.
    • 43.8 bushels/acre x PM+ price election ($0.75) = $32.85/acre.
       

    bpm_PM+

Protect your bottom line with Price Modifier PLUS!