What percentage does a CAT policy typically pay for losses?

A CAT (Catastrophic Risk Protection) policy typically pays for losses at a coverage level of 55%. This specialized type of insurance is designed to provide basic coverage for producers, ensuring that they receive assistance when they experience significant crop losses due to natural disasters or other severe events. The choice of 55% means that farmers will only need to cover a portion of the losses themselves, while the CAT policy helps mitigate the financial impact of greater-than-expected losses on their livelihoods.

This percentage is lower than the coverage levels provided by standard crop insurance policies, which often start at 65% or higher, making the CAT policy a more accessible option for farmers looking for cost-effective insurance solutions.