The Crop Insurance Industry Provides Reassurance to Farmers Impacted by the Midwest Floods
FOR IMMEDIATE RELEASE
June 19, 2008
OVERLAND PARK, Kan — Flooding across the Midwest has devastated communities across several states. Among those hardest hit are farmers, who have lost homes, livestock and thousands of acres of farmland.
“We haven’t seen an event like this since 1993,” said Bob Parkerson, President of National Crop Insurance Services (NCIS). “We want to reassure farmers that they are not alone. The crop insurance industry will stand by them. We have built reserves over the last few years with good weather, and have the financial stability and resources to help them assess their options, make the best decisions for their farms, and cover claims that will allow them to be back in business next season.”
Parkerson added, “We have been through this before, and will work with the Risk Management Agency to once again get money into the hands of producers as quickly as possible.”
Prevented planting claims and whole units that are lost from the flood do not have to wait until the crops go to harvest, and therefore will be paid much faster than claims deferred until harvest. Farmers will also receive their indemnity payments from the crop insurance policies much earlier than they will payments from the disaster program that is part of the 2008 Farm Bill.
Tips and Information for Farmers:
Following are tips and information for farmers impacted by the Midwest floods:
- Contact your agent if you have not already done so; they are your best resource in assessing your situation
- There are provisions in place within most crop insurance policies, including replanting and prevented planting, that can help you recover your losses.
- You have options. The Federal Crop Insurance Program underwent significant legislative reform following 1993, and now many farmers have alternatives to manage their individual farm-risk situations.
Provided below is a summary of the crop insurance policy benefits available to most insured farmers not only in the Midwest, but famers across the country facing the difficulties of the start of the 2008 growing season.
- If the farmer is able to plant his/her crop in a timely manner, but severe weather follows, such as the current Midwest flooding conditions, crop insurance benefits available to the farmer who has individual coverage are as follows:
- If crop damage occurs early, farmer may be able to receive a replant payment and replant the crop.
- If famer cannot replant timely, but growing conditions improve, an indemnity may be payable and the farmer can plant a second crop which may also be insured.
- If farmer cannot replant the original crop or plant a second crop, the farmer will receive an indemnity for his/her loss.
- If the farmer is unable to plant his/her crop due to flooding and/or excess moisture conditions, crop insurance benefits available to the farmer with individual coverage are as follows:
- If the farmer cannot plant original crop or switch to a new crop if conditions improve, the farmer may receive a “prevented planting” indemnity.
- If conditions improve, the farmer may plant a second crop which can be insured and a reduced indemnity can be paid to the farmer for the original crop that could not be planted.
Prevented planting and replant benefits are not available under the group plans of insurance.
The Federal Crop Insurance Program:
The federal crop insurance program is a public-private partnership, the industry and federal government work hand in hand. The crop insurance program is available to all producers on an equal basis and provides the financial stability for farmers and ranchers, including access to capital.
National Crop Insurance Services
National Crop Insurance Services (NCIS) is an international not-for-profit organization representing the interests of more than 60 crop insurance companies. NCIS member companies write Crop-Hail Insurance; Multiple Peril Crop Insurance (MPCI), the federally subsidized risk management program; and, privately developed crop insurance products totaling approximately $6.6 billion in premium, with liability totaling approximately $67 billion. These companies service all farmers participating in the federal program, including limited-resource and socially-disadvantaged farmers. In partnership with the government, these private companies are the safety net that equitably provides risk management to the American farmer. NCIS members range in size from one-state companies to national writers, as well as foreign company members.