Lamson, Dugan and Murray, LLP, Attorneys at Law

Wet Weather Problems Pt II: Crop Insurance and Your Options

Posted in Crop Insurance

Flooded Field

 

To plant or not to plant?  It is a question several farmers are facing this year in those areas of the Midwest where the rain hasn’t let up and the rivers have overtopped their banks.  In some areas, the decision has been made for them.  In those areas where the fields are beginning to dry out, farmers are well advised to speak with their crop insurance agent to determine how their decision may affect their crop insurance eligibility.

In light of the situation, I went to Greg McInnis from Ambank Insurance, in LeMars, Iowa to get his take on the weather conditions in relation to farmers’ options under their federal multi-peril crop insurance policies.  Born and raised in Plymouth County, Iowa, Greg McInnis has been handling farmers’ crop insurance needs for over 20 years and is currently the Managing Agent at Ambank Insurance’s LeMars branch. 

Planting deadlines are important for crop insurance eligibility.  What are the planting deadlines for a farmer to be eligible for a crop insurance claim?

I am in Northwest Iowa and plant deadlines vary per the crop and by location.  The final plant date for corn (May 31st) has come and gona and soybeans (June 15th) is fast approaching.  However, you can still plant an insurable crop within 25 days after those dates if you are insured for late planting.  A late planting results in a 1% reduction in coverage for every day past the plant deadline.  You cannot insure a crop which is planted 25 days after the plant deadline for most crops.  

What options does a farmer have when prevented from planting prior to the final plant date?

When you are prevented from planting you have a Prevented Plant claim.  After ensuring you have given proper and timely notice of the claim, you are left with a couple of options.  

First, you could take a 100% loss on a Prevented Plant claim of the first crop and plant a cover crop after the final plant date.  Remember, you cannot harvest the cover crop and cannot hay or graze the cover crop until November 1 under this option.   

Second, you could plant a second crop after the late plant date of the prevented crop.  The second crop is fully insured at 100% of the premium.  However, the premium and indemnity on the first crop will be reduced to 35%.  

What options does a farmer have when the original crop was damaged by the weather this early in the season?

If you believe your original crop was damaged by wind, hail or excessive moisture, you need to notify your agent who will contact the Approved Insurance Provider (AIP).  Thereafter, the AIP will introduce three scenarios.

First, you could replant the acres if the AIP determines it is practical to replant.  The policy provides coverage for the cost of the replant and the replanted acres are insured for the same production guarantee of the original crop. 

Second, you can take a 100% payment for the original crop loss minus appraisal and plant a second non-insured crop.  The acres and loss of the original crop will be used on your Actual Production History (APH).  You must also report the acres and production  on the second non-insured crop but such information will not be used for APH purposes. 

Third, you could choose to plant and insure a second crop with 100% premium and indemnity.  However, similar to the prevented plant claim, the original crop insurance premium and indemnity would be reduced to 35%. 

The original crop premium and indemnity can be returned to 100% if there is no claim on the second crop. 

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Greg emphasized that crop insurance eligibility and options are very case specific.  Anybody with questions on how they should proceed under their policy given the weather issues needs to meet with their insurance agent immediately. 

Greg McInnis can be reached by phone at 712-546-7821. 

For more information please check out the attached Prevented Plant Flow Chart   

 

 

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