The Crop Insurance Cycle
Policy Renewal/Change Options/Application
The Insurance Cycle begins each year with the insurance offer. Actuarial documents are published annually by the Risk Management Agency (RMA). Actuarial documents indicate what crops, types, varieties, and practices may be insured in each state and county, as well as how much insurance is available, available options, levels of coverage, price elections, and applicable premium rates. The Special Provisions of Insurance list program calendar dates, and general and special statements which may further define, limit, or modify coverage.
Sales Closing/Cancellation/Termination Dates
Insurers must complete and sign insurance applications by the sales closing date specified in the crop actuarial documents. If an application is signed after the crop sales closing date, the insurance provider may reject it.
For the following crop year, either the insurance provider or the policyholder can cancel the policy by providing written notice to the other party by the cancellation date specified in the crop policy. Changes to a policyholder’s coverage must be made before or on the crop sales closing date for a previous crop year policyholder. Unless the policyholder cancels the policy in writing on or before the crop cancellation date, the policy will automatically renew for the following crop year.
By providing written notice to the policyholder by the termination date specified in the crop policy, the insurance provider may terminate coverage for the following crop year for nonpayment of outstanding debt. If no premiums are earned for three consecutive years, the insurance provider may terminate coverage.
Unless the applicant is determined to be ineligible under the contract or Federal statute or regulation, the insurance provider will accept and process a properly completed and timely submitted insurance application. A summary of coverage will be provided to the applicant along with the appropriate policy documents. The policyholder cannot cancel the policy for the initial crop year after the application is accepted.
Planting begins on the insurance unit each year when the crop is insured. If late or prevented planting provisions apply, the crop must be planted by or before the published final planting date. Crops that are unable to be planted timely due to a variety of factors may be eligible for a prevented planting payment if prevented planting provisions apply.
For perennial crops, insurance attaches each crop year on the calendar date specified in the crop provisions.
Insurable and uninsurable acres planted or prevented from being planted, if prevented planting is available for a crop, must be reported annually by the policyholder for each insured crop in the county. On or before the applicable acreage reporting date specified in the crop actuarial documents, the insurance provider must receive the date of planting, share of the crop, acreage location, farming practices, and types or varieties planted. A crop insurance provider uses this report to determine the amount of coverage and premium. An acreage report filed after the crop acreage reporting deadline may not be covered by insurance providers.
Summary of Coverage
A properly completed and timely filed acreage report will be processed by the insurance provider, and the policyholder will receive a summary of coverage showing the insured crop, the insured acres, and the amount of insurance or guarantee. If permitted by the insurer, the policyholder can modify the filed acreage report.
Annual premiums are earned and payable at the start of insurance coverage. Based on the information in the acreage report, the insurance provider shall issue a premium billing no earlier than the date specified in the crop actuarial documents. Any administrative fees due will also be listed on the premium billing. An insurance provider may charge interest on outstanding premium balances if the premium or administrative fees have not been paid by the date specified in the actuarial documents or policy.
Notice of Damage or Loss
It is the policyholder’s responsibility to notify the insurer of any damage or loss within 72 hours of discovering the damage or loss, but not later than 15 days after the end of the insurance period unless otherwise specified in the individual crop policy. For additional requirements in the event of damage or loss, policyholders should consult the individual crop provisions. Before the crop is harvested or otherwise disposed of, the insurance provider can inspect the crop to determine the extent of damage or potential production.
Upon receiving a notice of damage or loss, the insurance provider will review it and, if necessary, send a loss adjuster to inspect the crop and collect pertinent information. An adjuster will gather the appropriate information from the policyholder, establish its value, and complete any necessary forms if the crop is to be destroyed or not harvested. The loss adjuster will gather the appropriate information and assist the policyholder in filing the claim for indemnity if the crop has been harvested or will not be harvested by the end of the insurance period. Losses must be documented by the policyholder, including the time, place, cause, and amount.
Once the insurance provider processes the indemnity claim, an indemnity check and a summary of indemnity payment will be issued showing any deductions for outstanding premiums, interest, or administrative fees from the indemnity amount.
Contract Change Date
Changes to the insurance program may be made by RMA from one year to the next. The insurance provider will notify the policyholder in writing of any changes to the policy, actuarial documents, or the Special Provisions of Insurance prior to the calendar date for contract changes specified in the crop policy. The policyholder will have the opportunity to review the changes and, if he/she desires, continue the insurance coverage for the following crop year, change the policy coverage, or cancel the insurance coverage. Any changes to the policy coverage that the policyholder makes must be made no later than the crop sales closing date. If the policyholder wishes to cancel the policy, a written notice must be submitted to the insurance provider on or before the crop cancellation date.