Montana’s unique hail insurance program paid out record amounts in 2013.
Due to costs associated with the extensive crop damage, the hail board voted to not offer refunds to farmers this year.
After issuing 2,082 policies last year, the Montana Department of Agriculture and hail board covered 1,046 losses totaling more than $14 million from hail events. In the program’s 98-year history, Montana hail insurance experienced the worst loss on record.
“The bottom line is Montana had a bad hail year,” say MDA Director Ron de Yong.
“With a sound fiscal management and a strong reserve fund, the department was able to cover 186% of premiums in 2013. After reviewing the actuarial report at our annual meeting, the hail board voted to not offer refunds to farmers this year to keep the program whole for the next year.”
The Montana state hail insurance program was created to provide basic hail insurance on any crop grown in the state, an unusual program in the U.S. The five-member board consists of the Montana Commissioner of Insurance Monica Lindeen, de Yong, chairman Gary Gollehon, and producers Trudy Lass Skari and Jim Schillinger.
A reserve fund is maintained to provide security for the program’s financial responsibilities.
“This might have been a once-in-a-lifetime hail year, but we need to be prepared for the worst and hope for the best,” says Gollehon. “Currently, we are looking into reinsurance so Montana farmers are protected next year.”
The program, with its existing reserves, can cover 122% of claims in 2014. In examining reinsurance, the board must consider catastrophic weather events that could result in losses to the state’s farm industry.
For more information on the Montana hail insurance program, contact MDA’s hail program office at (406) 444-2402, or visit the hail insurance website.
Information on the program is available on the MDA website at www.agr.mt.gov.