What type of crop insurance provides coverage for losses due to specific perils?

Catastrophic Risk Protection (CAT) insurance is designed specifically to provide coverage for losses due to specific perils, such as drought or excessive moisture, which directly affect crop yields. This type of insurance offers minimal coverage, ensuring that farmers have a safety net in place for catastrophic losses without carrying the higher premium costs associated with more comprehensive policies.

This coverage recognizes that certain events can severely impact production, and by focusing on these specific risks, CAT insurance helps to mitigate the financial strain on farmers. It enables them to receive payments if their yields fall below a certain level due to designated perils, thus ensuring a basic level of financial assistance in times of significant crop loss.

The other options involve different coverage parameters or calculations, such as production or revenue-based assessments that may not strictly cater to specific perils. For instance, Actual Production History (APH) focuses on historical yields rather than just specific peril coverage. Revenue Protection (RP) insurance considers revenue lost due to both yield and price declines, going beyond just specific perils. Basic Crop Insurance (BCI) offers standard coverage but still encompasses a broader range of risks. Thus, CAT insurance stands out for its focused approach to perils, providing essential protection for unforeseen catastrophic events.