Multi-Peril Crop Insurance
If you've been operating a farm for a number of years, you undoubtedly have had your fair share of experience with multi-peril policies. These policies are written through the Federal Crop Insurance program and are governed by statutes and regulations. The three basic types of crop insurance coverage policies we deal with are: Revenue Protection (RP), Revenue Protection with Harvest Price Exclusion (RP-HPE), and Yield Protection (YP). Each type has different payouts, which in turn have different associated insurance disputes.
Even though multi-peril insurance policies are subsidized by the Federal Government through the Federal Crop Insurance Corporation, many insurers will deny claims otherwise valid claims, or cut corners on payouts to reduce their own losses. The common crop insurance provisions published by the USDA provide you with the right to challenge claim denials. Our agricultural law attorneys can walk you through this process and help maximize your claim.
Multi-Peril Denials
Multi-Peril policies are intended to provide insurance coverage for "unavoidable, naturally occurring events" such as drought, disease, fire, flooding, insects, and other events. However, these policies do not cover manmade events, or circumstances for which the insurance company can blame the farmer. Only natural disasters and occurrences are covered.
-
Manmade Damage
Damage to crops which result from any act by a person is specifically excluded from Multi-Peril policies. These acts can include chemical drift, arson, terrorism, or vandalism.
-
Good Farming Practices
Failure to follow recognized good farming practices for the insured crop will result in a claim denial. These standards are determined by the USDA Risk Management Agency (RMA), the most recent handbook for which is found here. This is perhaps the most aggravating type of denial, but our attorneys can assist you in fighting it.
-
Water Containment Failure
Crops that are destroyed by water that was released (intentionally or accidentally) from a structure or building, are not covered by these policies. These structures include dams, locks, reservoirs, tanks, and other structures designed to keep water within them. Note that even if the failure was the result of a storm or natural occurrence, if the water originated from the structure, the claim will be denied.
-
Irrigation Equipment Failure
If your farm suffers from a breakdown of its irrigation equipment or facilities, the insurance company will deny your claim for any losses. Note, this includes a failure of established irrigation methods (like furrow irrigation) as well as mechanical equipment. The only exception to this is if the failure was the result of a natural occurrence & you took all the reasonable efforts to fix the irrigation in a reasonable amount of time. Cost of repair is not considered.
-
Poor Irrigation Practice
If your farm utilizes an established irrigation method, or utilizes irrigation equipment, but you fail to properly utilize the method or equipment, your crop loss claims will be denied.
-
Damage That is Not Evident
If you incur a loss in your crop that is not evident during the insured period, it's likely your crop loss claim will be denied. The damage must be evident - even if the company doesn't inspect it - during the coverage period.
Prevented Planting
-
If your crop sustains damage during certain parts of the crop year, you may not be able to replant your crop in time. Under these circumstances, your farm may be eligible for a Prevented Planting payment. If you're prevented from planting your chosen crop on the insured acreage because of an insured loss that occurred after you purchased the insurance policy, you may be eligible. However, to be covered, you must not have planted the crop during or after the late planting period.
Private Crop Insurance Coverages
Most crop insurance agents advise their clients that Multi-Peril policies don't cover everything that could happen to your crops. To fill the holes, many companies offer "private products" or "named peril insurance" plans. These plans cover a variety of specific crops against specific harms. Farms operating in certain areas of the country may be more likely to use these policies. In turn, insurance companies are more likely to deny coverage because they are not federally reinsured.
These policies include:
While each of these named peril insurance plans covers different crops, their insurance claim denials function similarly.