Premium Discounts and Surcharges

Premium discounts and surcharges acknowledge risk differences between customers, reducing premiums for customers without a history of repeated claims. Experience discounts and surcharges are calculated using an individual’s history of losses as compared to area losses. SCIC calculates premium discounts and surcharges by comparing the individual claim to the total net premium, including experience discount, paid by the producer and governments. When an increase in the number or size of losses is experienced, the discount, if present, is reduced or the surcharge is increased. Young farmers taking over family farms can use the experience obtained from the family farm for their own contract. Discounts or surcharges may be transferred directly to the new farmer with at least three years of experience on a previous contract. For young farmers without that experience, the transfer of earned credit would be implemented using partial credits with a three year progression to the full credits of the original contract.

Premium Discounts and Surcharges

Premium discounts and surcharges acknowledge risk differences among customers, reducing premiums for customers without a history of repeated claims. Experience discounts and surcharges are calculated using an individual’s history of losses and a comparison of individual loss history to area losses. When an increase in the number or size of losses is experienced, the discount, if present, is reduced or the surcharge is increased.

The following crops and programs are excluded from all experience discount and surcharge calculations:

  • camelina
  • dryland dry beans
  • honey
  • hemp
  • soybeans
  • vegetables
  • wild rice
  • timothy hay
  • the Forage Diversification Option
  • Forage Rainfall Insurance Program
  • Corn Heat Unit Program
  • Establishment Benefit
  • grain corn
  • Bee Mortality Insurance Program
  • Fruit Tree Insurance Program
  • Gopher Damage claims

How your individual claim history affects discount/surcharge:
The number of credits or debits earned will be added to the current balance. Partial credits are rounded down. Accumulated credits or debits must achieve a complete step before the discount or surchage is adjusted.

The maximum number of both debits and credits a customer can accumulate is 16. Customers with 16 credits cannot lose their 50 per cent discount as a result of one or two year claims.
There is a one-year lag in the calculation. New contract holders will remain at zero following their first year of coverage due to this lag.