What is the main distinction of Traditional Hail insurance?

The main distinction of Traditional Hail insurance is that it pays based on the percentage of damage. This type of insurance specifically provides coverage for loss or damage to crops solely due to hail, and the payment is determined by the extent of the damage assessed after an event. This means if a farmer experiences hail damage, they would receive compensation that reflects the proportion of the crop that was affected, rather than a fixed amount.

Understanding this feature is crucial because it underscores the nature of loss in relation to the valuation of the insured crops. Farmers rely on this percentage-based payment to accurately reflect their losses and recover from the specific effects of hail as they assess their financial planning and decisions following a hail event. The insurance operates by assessing the actual damage, with compensation adjusted accordingly to minimize loss and ensure financial stability for the insured farmer.