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Keep Good Records To Ease Crop Insurance Claims

September 14, 2010

There are reports of wide yield variability trickling in from across the Corn Belt, and that may mean you are eligible for crop insurance coverage from significant losses. You may have to work harder to prove it.

Now that most  policies are written for county farm averages, proving those losses and getting paid for it could come down to good record keeping, says Steven Johnson, Polk County farm management specialist Iowa State University Extension. He cautions farmers to keep track of their yields on a field by field basis, and be ready to back that up with yield monitor data in order to make their life a little easier down the road. Marking bin levels in cases of shared storage is also a good idea this fall.  

"This fall is going to be different because most producers are in enterprise units; so you’ve got all of your fields together in a county. It’ll be harder to trigger a loss. And because we’re going to have higher prices in the fall than they were in the spring, you’ll use the higher fall prices to calculate your revenue guarantee. In essence, it will be harder to trigger a loss unless you’ve got significant yield loss. You better be able to keep those bushels separate by field, or you better have a significant loss across all fields in the county."

 
"Did you do anything that can provide some logic to the adjuster? The adjuster is going to show up and say ‘yeah we understand you think you had a loss,’ and you’ll say the bushels just aren’t here."
 
But believing it and saying it just isn't enough. "It’s thinking ahead," says Johnson.  
 
Are You Too Late? Farmers who may have already harvested their crops and experienced losses need to contact their agent right away. "Don’t contact the FSA, they’ll say ‘we’ll see you in a year.’" An adjustor needs to visit your farm and making his life easier will ease the claim process. 
 
"The important thing is that you can allocate those bushels by field. If you can’t, you’re going to throw all those bushels together and you’re going to get the average yield across all those yields," says Johnson. "I don’t view that as in the best interest of a producer wanting to manage revenue risk. I’m going to keep ledgers and compliment that with yield monitor data. If I’m ever audited, or if I’m at a loss, I better be able to say these bushels came from this field, and I better be able to back that up with data."  
 
Triggering Loss. The recent upsurge in prices also makes record keep more important because the losses with revenue-based policies will be figured off the fall prices, Johnson says. "A lot of producers aren’t going to trigger losses, even if they see poor yields, because the get to multiply their revenue guarantee by the fall price. That hurts you in a sense because you’re going to have more bushels missing to ever trigger an indemnity payment. 
 
A news release from Johnson lists these 7 tips for improving your chances of a successful claim:
 
  1. Notify your crop insurance agent: Contact your agent within 72 hours of the initial discovery of damage and no later than 15 days after the end of the insurance period. The end of the period is the earlier of total destruction of the crop on the insured unit, or harvest of the unit, or December 1.

    If you initially discover damage within 15 days of harvest or during harvest you may be required to leave representative samples of the unharvested crop for inspection by a crop insurance adjuster. The samples must be at least 10 feet wide and extend the entire length of each field in the unit. An optional unit will typically be an individual field within a section of land by separate ownership.

     

  2. Keep records organized: In case of loss or APH audit the insured farmer must keep records separate for each unit. Enterprise unit coverage is common and it combines the production of all fields of that crop in the county together. Optional units will be combined if the production is commingled, which often occurs when insured farmers get busy during harvest. 

    It may be necessary to keep production separate for each farming practice, type of crop and variety depending on the crop being harvested and crop insurance coverage in place.

     

  3. Measure old-crop grain: Production stored on the farm from previous years must be measured by a crop insurance adjuster prior to adding any new-crop bushels. For bushels stored on the farm and not at a loss, keep written records of bin markings, truckload identifications and/or combine monitor records in case of a future APH audit. For loss situations, when production from more than one unit and/or insurable and uninsurable acreage will be stored in the same storage structure, an inspection by an adjuster should be requested.

     

  4. Specify load information: Maintain a ledger by crop and record the loads of production by unit and field number, and date of harvest; identify the truck or wagon used to transport the grain to the storage structure and the estimated volume of each load.

     

  5. Evidence of delivery: Production delivered to a commercial elevator or processor will require evidence of the delivery amount. Individual load tickets alone will not suffice, but a load summary and/or settlement sheet is required for verification of 100% of the production delivered, not just the insured farmer’s share.

    Individual load tickets may be needed in addition to the summary and/or settlement sheets and can include specifics such as the farm identification. Have available written third party verification or settlement of a claim as much as possible.

     

  6. If you feed livestock: In the event production must be fed prior to a claim being worked by the adjuster, the insured farmer is responsible for maintaining detailed records. That is a formal, consistent, written record system of fed production and you need to have the records available at the time the claim is prepared.

     

  7. Keep in touch with your agent: Cooperate with your crop insurance agent and the adjuster in an investigation or settlement of a claim. You need to understand the emotions that come with harvest--and always practice farm safety.

 

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RELATED TOPICS: Marketing, Risk Management

 
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COMMENTS (1 Comments)

Mark - Holdrege, NE
There are some good reminders here, but I would like to clarify some inconsistencies with Mr. Johnson's comments. The article is confusing for producers on these 2 issues:

He says most policies are now enterprise unit based, but a producer must keep bushels seperate, or the bushels will be combined and work against the farmer in a loss. That is contradictory.

Second, but more importantly, NOT ALL revenue products use the higher harvest price to calculate your harvested dollars, (or Production to Count). Only RA without the harvest price option will work against a farmer and cause the loss trigger to be lower in that way.

CRC or RA WITH the harvest price option, both trigger at the guaranteed bushel level and pay at the higher price per bushel if there is a loss of bushels.

MOST farmers I know will not be hurt by higher fall prices as Mr. Johnson suggests.

The best piece of information from the article: COMMUNICATE with your crop insurance agent!!

Respectfully, Mark - in Nebraska


5:03 PM Sep 14th
 



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