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Drought spurs insurance queries

N early 90% of the corn and soybean acres in Iowa are covered by multiple peril crop insurance. Drought damage is an insurable loss under these policies. Farmers should consult with their crop insurance agents before harvesting or destroying any drought-damaged crops, says William Edwards, an Iowa State University Extension economist.

“The agent will notify a certified crop adjuster to appraise the insured crops,” Edwards says. “Keep in mind, when damage is widespread, adjusters cannot be everywhere at once. The adjuster may declare the crop a complete loss. If it has significant yield potential, it can be left and harvested in the fall. If the producer elects to harvest it early, as silage, check strips can be left to verify the actual yield achieved. In any case, the acres must be released by the insurance company before the crop can be harvested early or destroyed.”

Check with insurance agent

Any insurance indemnity payments will be settled based on actual harvested production over the entire insurance unit, he adds. Fields declared a complete loss will be combined with any harvested acres in the same insurance unit to calculate the final yield. Yield losses are equal to the farm’s historical yield times the level of guarantee purchased, minus the actual yield.

Of the insured acres in Iowa, 90% are covered by Revenue Protection insurance policies in 2012. Yield losses will be paid at a rate equal to the average CME futures market price during the month of October, if it exceeds the average February price of $5.68 for corn (December contract) or $12.55 for soybeans (November contract).

Following harvest, the usual evidence of actual production should be collected and submitted to the crop insurance agent as soon as possible if it appears that a payment is likely, but not later than 15 days after the end of the insurance period, which is Dec. 10 for corn and soybeans in Iowa. If a producer has a history of selling more than half the crop in the tax year following harvest, reporting of crop insurance proceeds can be deferred to the next tax year, says Edwards.

More information about crop insurance policies and procedures can be found on ISU’s Ag Decision Maker website at www.extension.iastate.edu/agdm/
cdcostsreturns.html
.

For additional crop, livestock, home and yard drought-related information, see ISU’s special Dealing With Disasters website at www.extension.iastate.
edu/topic/recovering-disasters
.

Source: ISU Extension

This article published in the August, 2012 edition of WALLACES FARMER.

All rights reserved. Copyright Farm Progress Cos. 2012.