What to know to keep crops insured throughout the planting and harvest season
An unfortunate reality of being a farmer is dealing with losses due to extreme weather. The Midwest has endured both drought and flooding in recent years, and these conditions can wreak havoc on crops and impact harvests.
Over roughly the last 30 years, disasters have caused an estimated $3.8 trillion in crop and livestock losses, or about 5% of global GDP per year according to the Food and Agriculture Organization of the United Nations report, “The Impact of Disasters on Agriculture and Food Security.”
This is why it’s critical to have crop insurance, but the insurance is only truly valuable if used properly. Here are some important requirements and dates that farmers in the region should keep in mind to maximize their coverage during the busy harvest season.
File damage claims promptly
If you notice that an insured crop has sustained damage, you should report it to your agent as soon as possible — in fact, most policies state that you should do so within 72 hours.
Sometimes, damage might be spotted while you’re in the middle of harvesting crops. In this situation, you should report losses within 15 days of harvest completion. If you don’t file a report within 60 days, insurance companies have the right to reject your claim. It’s also important throughout your harvest to keep production separate by section or unit if fields cross section lines. This will help adjusters properly assess damage and harvested production for the claim process.
All losses must be reported by defined cutoff dates, so check your state’s cutoff dates in the event of loss.
Other things to keep in mind
In some instances, you may want to completely destroy a damaged crop, possibly to plant a cover crop or put the crop to some other use such as silage or bale. If you’re considering this option, you should contact your insurance advisor at least two weeks in advance to have an appraisal completed. Destroying evidence of damage before an appraisal is done can hinder your chance of collecting on a claim.
Farmers may also incur losses due to a drop in harvest price rather than crop damage. If you have a revenue protection policy in place and experience a revenue loss, you should report this within 45 days of the official announcement of harvest prices by the USDA’s Risk Management Agency. Wheat, barley and canola prices are reported annually on September 1, while corn and soybean prices are reported on November 1.
Missing a deadline can be costly. That’s why it’s important to work with an experienced ag banking and insurance partner who can help you find the right coverage and answer any questions. For momentum-building solutions for your agricultural business, visit Old National’s Agribusiness Lending page at oldnational.com/business/commercial-banking/specialized-industries/agribusiness-banking.
