Non-Yield Plans
When calculating the Premium Rate for non-yield, the first step is max(0, PG-AP)*Insured Unit Price.
Why do we not use something like # Units Affected * Insured Unit Price instead? Based on the above (wiki), it seems that non-yield rate relies on past historical loss from the Yield
Comments
This is how agriculture insurance is done in Canada -> We always rely on past historical losses. We don't usually think how it would be done otherwise as agriculture insurance guidelines comes from the crown corps (MASC, Agricorp etc.)