A farm is both a home and a business. Farm insurance can be written as a monoline policy or as a package policy, and it can provide both personal coverages (for the dwelling and family) and commercial coverages (for farm buildings, equipment and operations), along with both property and liability coverages. A package is available but not required. Farm policies are sold by private insurers, not issued by the USDA.

Crops are a separate exposure. A grower's income depends on a crop exposed to weather the grower cannot control. Federal law requires that an insured crop loss be due to drought, flood or other natural disaster, and USDA describes covered perils as unavoidable and beyond the farmer's control. The policy indemnifies loss above a deductible; it does not guarantee a profit.

Perils vary by crop. For corn, the Coarse Grains Crop Provisions list adverse weather, fire, insects, plant disease, wildlife, earthquake, volcanic eruption and failure of the irrigation water supply from those causes; insects and disease count only if control measures were adequate. By statute, losses from the producer's neglect or failure to follow good farming practices are not covered.

The role of the federal government: the Federal Crop Insurance Program is a public-private partnership. The Federal Crop Insurance Corporation (FCIC), through USDA's Risk Management Agency (RMA), establishes or approves premium rates and terms, administers premium and expense subsidies, and reinsures the companies. Private insurers sell and service the policies through private agents, not USDA employees.