Wind damage and crop insurance
Wind is a covered event in Multi-Peril Crop Insurance. Farmers whose insured crop acres have been affected by the recent derecho may be eligible for indemnity payments. Affected farmers should file a Notice of Loss (NOL) with their crop insurance agent within 72 hours of the initial time of discovery of damage or loss and follow up in writing within 15 days. When filing a timely NOL is not feasible, a delayed NOL may be accepted.
The NOL allows the Approved Insurance Provider (AIP) to contact the policyholder and make a determination in a case-by-case basis whether an indemnity will be paid. That decision will depend both on field conditions and farmer’s decisions:
If the AIP determines that field conditions will prevent farmers from ever being able to mechanically harvest the crop, that production will be considered a full loss. Otherwise, the farmer can choose from the following options:
1. Settle the case based on appraised production; or
2. Take the crop to harvest.
If a farmer chooses to harvest the crop (even if they chose option 1 in the first place), they must accept the highest of harvested production or appraised production for claims purposes. Farmers who choose option 1 first and then decide to harvest the crop must file a revised claim. Consider these steps following an insurable loss:
1. Contact your crop insurance agent as soon as possible, and file a NOL.
2. If you want an immediate release of the field for another use, you can request the use of Representative Sample Areas or RSAs by the AIP. These are areas of a field that the AIP authorizes to leave untouched for later appraisal when an accurate appraisal cannot be made at the present time. Appraisals from the RSAs of the unharvested crop acreage are later used to settle the claim.
3. You can salvage any remaining crop for use as silage, but your indemnity payment might be affected depending on how the crop is insured:
a. For corn insured for grain, once the AIP releases the field for another use, you can harvest for silage without penalty.
b. For corn insured for gilage, if you agree to settle in appraised production, but you still attempt to harvest for silage, you must accept the higher of the appraised or the harvested production for claim purposes.
4. You can hay or graze a second crop without penalty if the ground has been released for another use by the AIP, it is not practical to replant the insured crop, and the second crop will not be insured. This might be of interest to farmers who use cover crops.
5. The only case in which you are required to physically destroy your crop production is when grain production is mature and no local buyers are willing to purchase it (typically due to molds and toxins in the mature grain), and it is not economical to ship it to other buyers. This is the case of a crop with Zero Market Value (ZMV), and destruction should take place whether the grain has been harvested or is still in the field.
6. A Claims Advisory from the USDA Risk Management Agency on August 21, 2020 indicated that the damaged crop in the released field for another use is notrequired to be harvested (even for RSAs appraisals).
Finally, unless the AIP releases all acres in a unit, indemnity payments from crop insurance will not arrive until all crops are harvested and production records are submitted, later in the year.
Steve Johnson is an ISU Extension farm management specialist. Email firstname.lastname@example.org.
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