Texas All Lines Adjuster Practice Test

Which type of insurance provides a higher coverage amount based on harvest-market prices?

1. Revenue Assurance

2. Crop Revenue Coverage

3. Revenue Protection

4. Yield Minimization

The correct answer is: Revenue Protection

The correct answer is Revenue Protection. This type of insurance is designed specifically to cover farmers against loss of revenue due to both yield loss and price fluctuations in the market. Revenue Protection bases its coverage on the expected market prices at the time of planting, allowing for a higher amount of coverage that reflects potential market conditions at the time of the harvest. This approach is particularly beneficial in volatile markets, as it protects income that would otherwise be lost due to changes in both yield and price—not just one or the other. By ensuring coverage that is aligned with market prices during harvest, Revenue Protection offers a comprehensive safety net for producers. Other types of coverage, while also important, do not provide the same level of coverage based on current market conditions. For instance, Revenue Assurance and Crop Revenue Coverage have unique structures that may not fully account for price fluctuations the same way Revenue Protection does. Yield Minimization is primarily focused on protecting against declining yields rather than managing revenue loss due to either yield or market price changes.