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3 things you may not know about your crop hail coverage

1. Do you know if your crop hail policy has an actual cash value clause?

An actual cash value clause states that the amount payable may not exceed the actual cash value of the portion of the crop destroyed by perils insured against. The actual cash value may be determined  by averaging the next 10 days closing market cash price at a facility where you normally sell your grain.

Most years, the actual cash value clause doesn’t affect a hail payment. However, if the weather is abnormally dry or wet, the crop hail coverage may exceed the actual cash value of the crop. Unfortunately, this situation is when the actual cash value clause may reduce a hail payment.

For example: You insured your crop to value at $800 per acre, but at claim time, a drought caused the crop to only be worth $600 per acre. The hail storm created a 30% hail loss.  On a full coverage policy, the loss calculation would use the $600 actual cash value limit rather than the $800 crop hail limit. This would result in a $180 per acre claim payment ($600 x 30%) rather than a $240 claim payment ($800 x 30%).

Check to see if an actual cash value clause is included in your crop hail policy. Continue reading

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Green Snap Endorsement

What is Green Snap?

FMH GreenSnap Picture

Green Snap is the severing of the corn stalks by windstorm at a joint above the brace roots and below the ear that will prevent the harvesting of the ears by mechanical equipment.

When is Green Snap most likely to occur?

Corn has the highest chance of suffering from Green Snap when the corn plant is growing rapidly, most commonly from V5 to V8 and again from V12 to R1.

What are the most common factors that increase chances of Green Snap?

Since corn is most susceptible to Green Snap during rapid growth; any condition that promotes rapid growth is an influencing factor. Post emergence herbicides, application of high rates of nitrogen fertilizer or manure, increased planting populations, conventional tillage, and higher yielding genetics can increase the chance of Green Snap.

Do hybrids matter?

Some hybrids are more susceptible than others, but even the most stable hybrids have a window when Green Snap can occur.

How do I get Green Snap coverage?

You can add Green Snap coverage to your Crop Hail policy.

Is a wind policy the same as a Green Snap policy?

No, a wind policy pays for the extra expense of harvesting corn blown down from a wind storm. You can also add this coverage to your crop hail policy. 

How does Green Snap coverage work and do I have options?

Yes, here is a list of 3 possible coverage options: Full, DXS10, and IP2F. In the chart below, you can get a feel for how each policy would pay at each loss level: 3%, 15%, and 55%.

FMH GreenSnap Payout Chart

With the full coverage policy, coverage pays at the first percent of loss. A loss above 70%, you will receive 1/2% bonus per 1% loss.

The DXS10 policy stands for 10% disappearing deductible. Your coverage begins after the loss exceeds 10%. The percent loss is multiplied by 1.25% until the loss reaches 50%. At this point the 10% deductible has disappeared. You will get the 1/2% bonus above a 70% loss. Here is an example of how the payout equation works; you have a 15% Green Snap Loss minus 10% deductible times 1.25 equals a 6.3% payout.

Increasing Payment 2 Factor, IP2F, provides full coverage up to 10% loss. When the loss exceeds 10%, the loss percentage in excess of 5%  is multiplied by a factor of 2. For instance, you have a 15% Green Snap Loss minus 5% deductible times 2 equals a 20% payout.  The loss  cannot exceed 100%. As you can see in the chart above, you are paid 100% of coverage once the loss reaches 55%.

The payout percentage is multiplied by the dollar amount of coverage per acre you elect. 

How long does the coverage stay in force?

Coverage terminates on September 15th

What is not covered?

Neglect, other weather perils, insects, disease, chemicals, failure of ears to pollinate, failure to follow good farming practices, and failure to harvest the field corn in a timely manner is excluded from coverage.

 

 

Resources:

Between The Rows, Green Snap in Corn. (July 18, 2011). Issue:14, Wyffels Hybrids. Retrieved from http://www.wyffels.com/agronomic-solutions/weather-and-environment/green-snap-in-corn/

Farmer’s Mutual Hail Green Snap Brochure