As you get ready to see your Insurance Specialist this year there are a few changes you should note. Every year the Risk Management Agency (RMA) reviews the current insurance policies and makes corrections to help enhance them. This year we saw RMA address issues related to Prevented Planting (PP), Replants, Conservation Compliance, Actual Production History (APH) concerns and others that will affect your policy.
With Prevented Planting always on RMA’s radar, they made a few more changes this year making PP potential look a little less beneficial. They eliminated the additional buy up PT option many had purchased in the past that would increase their PP guarantee by 10%. Most crop policies have a 60% base PP coverage before any additional options. This year with the elimination of the PT option, the only option available is the PF option which increases the PP coverage by 5%. This option has been around for a while but rarely used since most who buy up PP would buy the PT option. If you are in a PP area or concerned about PP this spring, contact your Insurance Specialist about possibly buying this option.
There have been a few changes with the Replant language the last few years as well. As a reminder, a “replant claim” may be paid if you replant a crop to the previously planted crop in the same year and meet some other criteria such as the 20/20 rule, and if it was practical to replant. In 2016 and before, it was generally viewed as practical to replant a crop up to the final plant date of that crop. After that, in the late planting period it was up to the discretion of the adjuster and company to determine if it was practical to replant.
In 2017, RMA changed the language to say it was practical to replant throughout the late planting period. For most crops this is 25 days after the final plant date. For example, in counties with a May 31 final plant date on corn, it was practical to replant corn on June 25.
For 2018, this language has changed to 10 days after the final plant date. This may still be a little later than most would want to replant, but it is a little improvement from last year.
The Replant payment on sugar beets also changed this year from $80 in 2017 to $110 in 2018. In the past we have seen sugar beet producers purchase additional replant coverage to help increase their payment. This year you may still want to consider the additional replant option if the $110 still does not cover your costs to replant.
Conservation compliance was added to crop insurance as a result of the 2014 Farm Bill. Originally a farmer had to have an AD-1026 form signed at the Farm Service Agency (FSA) office by June 1 of the previous crop year to be eligible for the crop insurance premium subsidy. This means to receive a subsidy on your 2017 crop insurance policy, an AD-1026 had to be signed at the FSA office by June 1 of 2016.
There were some exceptions to this rule with new entities and insureds but most policies would not qualify for these exceptions. Beginning in 2018, the deadline to have an AD-1026 form signed is August 15 of the current crop year.
The coverage on most crop insurance policies is based on your Actual Production History or APH. In the past you were required to use your actual yields regardless of any insured or uninsured cause of loss. For example, if the neighbor’s spray drifted on to your crop and destroyed it, you would have to use a 0 bushel yield for that database. Remember these databases hold up to 10 years of history, so it would take another 10 years of history on that ground before that 0 would be removed from the calculation of your APH.
Beginning with the 2018 crop year, RMA has added language allowing Unavoidable Uninsured Fire and Third Party Damage acres and yield to be removed from the calculation. This is only for production affected during the 2017 crop year and going forward. There are some additional requirements, so please see your Insurance Specialist if you feel this could affect your policy.
These are not all of the changes for the year, but some of the most discussed with our customers over the last couple of weeks. With the sales closing date of March 15 right around the corner, make sure you meet with your Insurance Specialist to go through any of these changes or others that may affect your policy so you can get personalized coverage for your operation. If you have any entity or operational changes, your insurance specialist may need to make some corrections to your policy.
