Thisstudy was conducted to analyze the farmer’s willingness to pay for crop insurance and to investigate the factors that influence willingness to participate and pay for crop insurance. Contingent Valuation Method (CVM) and Heckman selection models were applied to analyze the primary data. Findings show that farmers were interested to pay minimum amount of premium, landholdings and farm income were found to be significant factors that influence farmer’s willingness to pay for crop insurance. While landholding, farm income, credit, loss experience, land tenure and expected yield were found to be significant influencing factors towards willingness to participate in crop insurance