Idaho Property and Casualty Practice Exam 2026 - Free Practice Questions and Study Guide

Multi-peril crop insurance serves as a vital safety net for farmers, covering a variety of risks associated with crop production. The statement that this type of insurance is reinsured by the federal government through the Federal Crop Insurance Corporation (FCIC) is correct. The FCIC plays a crucial role in stabilizing the agricultural economy by providing financial support to farmers when they experience losses due to unforeseen events like drought, flooding, or other insured perils.

By involving the federal government in the reinsurance process, the multi-peril crop insurance program helps distribute the risk among a larger pool, making it more affordable and accessible for farmers. This backing encourages greater participation in crop insurance, which ultimately contributes to the overall health of the agricultural sector.

The other statements, while mentioning genuine concerns related to crop insurance, misrepresent either the coverage specifics or the reinsurance structure associated with Multi-Peril Crop Insurance. Understanding the role of the FCIC emphasizes the support system in place for farmers, illustrating the safety net that this insurance provides against various agricultural risks.