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Avoid This Crop Insurance Mistake!

If you've purchased crop insurance for 2011, check you policy and paperwork now to make sure your name and Tax ID are correct. If you are still in the process of buying crop insurance (deadline is March 15) make sure you get this information filled out correctly.

This warning and advice comes from Steve Griffin, a crop insurance consultant based in West Des Moines, Iowa. He points out there are a number of changes in the rules governing crop insurance this year. One of the less-publicized changes in the new COMBO policy involves provisions and procedures for correcting mistakes made in submitting the applicant's name (e.g., farmer's name or farming corporation name) and tax identification number on the crop insurance application, transfer, or policy change form. Griffin offers the following explanation and recommendations regarding these new rules.

Crop Insurance: get your name and taxID right, or else!

Previously, an error made in the applicant's name (e.g., using a nickname, missing middle name, middle name used as a first name, an incomplete corporate name, or a misspelling) could be easily corrected if caught before the acreage reporting date after the crop is planted.  A mistake in the tax identification number could also be corrected (the applicant's signature is required) by the applicant before the acreage reporting date.

Both corrections (all other information on the application, except the mailing address, is not correctable) were allowed unless there was evidence of the intentional misrepresentation, a fairly high legal standard that requires proof of intent. The new COMBO policy changes those rules and raises the bar against the applicant. Under the new policy, if the name or tax identification is incorrect the applicant must now prove that the error was "inadvertent". The burden of proof is now on the farmer and the legal standard is less defined.

Farmers would be wise to double check their existing policies that will be renewing or their new policies that the full and complete legal name is on the policy form that exactly matches the SSN or EIN provided. If the applicant's name does not exactly match the reported tax identification number (e.g., social security number (SSN) or employer's identification number (EIN) on file with the Internal Revenue Service, the policy and its coverage can be voided. The penalty may be that the policy coverage will be voided when you really needed it, even if you paid the premium and followed all of the other rules.

Farmers and crop-share landlords have until March 15 to sign up

Farmers and crop-share landlords have until March 15, 2011 to signup for federal crop insurance for 2011 or to make changes to their existing policies. This year's high crop prices, market volatility and potential to lock-in profits is causing many farmers to take high coverage options and revenue plans, even with high sticker-shock premiums that can cost over $100 per acre. The USDA Risk Management Agency (RMA) has unveiled its COMBO policy that combines the past yield-based and revenue-based policies into a single policy with multiple options.

Steven C. Griffin, AFIS, is a crop insurance consultant and expert witness in crop insurance disputes between farmers and their crop insurance companies and crop insurance companies and RMA. Griffin can be contacted through his website: www.aggiexpert.com and is based in West Des Moines, IA. Griffin has years of experience working in the crop insurance industry and now has his own crop insurance consulting business.