Crop Insurance – What You Need to Know

Purchasing crop insurance from your local agent is a risk management option that can work in conjunction with your farm insurance policy to provide the best possible outcome for protecting your crops against natural disasters and loss. Federal Crop Insurance Corporation (FCIC) programs can be purchased through private insurance companies, like Farm & Country Insurance.

How it Works

Crop insurance is administered by the Risk Management Agency (RMA) and covers all natural causes of loss listed in your policy. For farmers without insurance, the Noninsured Crop Disaster Assistance Program (NAP), provides financial assistance for non-insurable crops when loss of inventory, low yields, or prevented planting occurs because of a natural disaster. Farm & Country Insurance sells and services crop insurance policies in New York State.

The Role of RMA

RMA provides policies for more than 100 crops (this number would be much higher if every insurance plan available for the crops insured in every county were counted). RMA also conducts studies to determine the feasibility of insuring many other crops and is conducting pilot programs for some new crop policies in selected states and counties.

What You Need to Know

1. Report Your Planted Acreage Accurately

• Underreporting – When purchasing Crop Insurance, remember that the production for an insured crop is derived from all planted acreage for that crop per unit, whether you reported all of the acres in that unit or not. It’s important that you don’t underreport your acres, since your yield will be artificially inflated and you will receive a lower indemnity payment.

• Over-reporting – If you overreport your acres when purchasing Crop Insurance, your production to count will be derived from all planted acreage for that crop per unit. The acreage will be reduced to the correct number of acres. The reduction in your total guarantee will cause your indemnity to be slightly less due to the reduction in your total guarantee (not your per acre guarantee). In this case, any overpayment of premium will be refunded.

2. Report All Farm Serial Numbers (FSNs) – If you fail fail to report all farm serial numbers (FSNs) planted to the insured crop, the unreported FSNs will not have coverage. Be sure to insert the planted acreage figure under the farm number on your acreage reporting form.

3. Report the Production for all (FSNs) – If you do not report the production information for all FSNs on or before the production reporting date, the production cannot be added at acreage reporting time. The unit without production will be assigned a yield based on the variable T-yield (a percentage of the county T-yield) procedure, which is generally lower than the grower's actual yields. The yield guarantee will be reduced and any indemnity payment will be less.

4. If You’re a New Producer – For new producers, you’ll need to elect "New Producer" status on or before the production reporting date for the insured crop. Otherwise, the yield on the crop will be assigned using the variable T-yield method instead of using 100% of the county t-yield, which would offer a better outcome. The yield guarantee will be reduced and any indemnity payment will be lower.

5. For New Farms – Indicate “Added Land” – When filling out your acreage report, if you fail to indicate "Added Land", the yield will be calculated using the variable T-yield method instead of more favorable methods. The yield guarantee will be reduced and any indemnity payment will be lower.

6. If You Change Harvesting Methods – If you are harvesting the insured crop in a manner other than what it was initially insured for without informing your crop insurance carrier, you will have a problem when you make a claim. For example: if you insured your corn as grain, but harvest it as silage, there is no actual harvested grain for the adjuster to measure. Therefore, the crop must be field appraised for grain content before harvested. The adjuster cannot appraise the grain content of harvested corn silage and the production to count will be assessed at the full guarantee. No indemnity will be paid.

7. Get Approval Before Destroying a Crop – If you destroy an insured crop without the insurance company's approval before the claim adjustment is made, the crop will be assessed at the full production guarantee and no indemnity will be paid.

Conclusion

Purchasing Crop Insurance can be confusing. And, making mistakes along the way can be costly when it comes to making a claim. Your Farm & Country Insurance agent, located in Honeoye Falls, NY, will help you choose the best crop insurance coverage based on your particular farm and budgetary needs. Email us by using our CONTACT FORM or call us today at 585-624-2474.