Texas All Lines Adjuster Practice Test

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How does Crop Revenue Insurance function?

It only protects against loss of physical crops
It combines crop-yield insurance and price insurance
It is exclusively for organic farms
It removes the need for all other types of crop insurance

The correct answer is: It combines crop-yield insurance and price insurance

Crop Revenue Insurance is designed to protect farmers against revenue loss due to fluctuations in both crop yield and market price. This type of insurance effectively combines elements of both crop-yield insurance—which offers protection in case the actual yield falls below a predetermined level—and price insurance—which safeguards against falling commodity prices that could affect overall revenue. By integrating these two aspects, Crop Revenue Insurance provides a more comprehensive coverage, ensuring that farmers can manage risk from various market forces that could impact their financial stability. This multifaceted approach helps ensure that, in the event of a poor harvest or a decline in market prices, the combined protections will support the farmer's anticipated revenue, leading to a more secure agricultural operation. Other options presented do not encompass the full scope of what Crop Revenue Insurance offers.