Despite delays, crop insurance paying off big
Despite the devastating hand Mother Nature dealt many of the nation's corn and soybean farmers this summer, the damage to those farmers' bottom lines wasn't as bad as it could have been.
That's thanks to crop insurance. Those who had crop insurance coverage -- like the 70% of farmers in Missouri who utilized revenue-protection policies -- were able to stay afloat financially despite yields that barely justified running the combine this fall.
"In a tough year like 2012, crop insurance is the difference between a financial hardship and getting the crop into the ground next year," says Federal Crop Insurance Corporation (FCIC) manager William Murphy, who recently spoke on the topic at the University of Missouri (MU).
Specific to that state, MU ag economist Ron Plain says crop insurance has, at least in the last decade, made financial sense considering the payout from federal crop insurance indemnities was almost twice the amount paid into the program by farmers ($1.80 and $1.00, respectively). "For the state of Missouri, it's a good investment," Plain adds.
But, if you suffered a major crop failure on account of the drought and collected an indemnity payment of $200,000 or above, MU Extension economist Ray Massey says, in a university report, that you "should expect to be audited by FCIC."
Keeping up the claims pace
Another thing to expect this year as you file crop insurance indemnity claims is a little longer wait time in getting that claim processed and getting the money in your pocket, says Dereck Klaassen, Field Supervisor for Farmers Mutual Hail Insurance Company of Iowa based in Indianola, Iowa. He says he and his agents have experienced a spike in claims this year, and while that wasn't unexpected, he says it's added to the time it takes for farmers to ultimately receive their checks.
"I am getting a lot of calls wondering when the adjusters are going to be there to work their claims. I know that everyone wants to be first to get their insurance checks but producers need to have patience, we will get to everyone," Klaassen says. "Some producers will get done next week and some probably will not get done until into the new year."
There are ways to help trim that delay, namely by getting all the paperwork ready for the agent before an agent's visit so that the process can begin quickly thereafter.
"The two biggest things that are slowing us down right now are producers not having their summary sheets from the commercial facilities where they took grain to this fall, because we cannot use scale tickets to settle claim when the grain is stored in a commercial facility. These scale tickets must be supported by a summary sheet, settlement sheet, ledger sheet or assembly sheet. Also, on these sheets the producer needs to mark where the loads came from," Klaassen says. "And, producers need to have 100% of the production off of a unit that they share crop with another person. For example, if a producer has their 50% share in a bin at home and the other 50% was taken to an elevator and they do not have the summary sheet for the other 50% that belongs to the share person. To settle a claim we need to have total production from the unit."