Wednesday, September 5, 2012

Aflotoxin Poses Risk to Crop Insurance Recovery

There have been a number of reports in recent days about elevated aflotoxin levels in harvested corn. Such corn can be rejected by the local elevator and is also unfit for livestock consumption. All is not lost, however, if the crop is covered by crop insurance. Hoosier Ag Today recently reported that the presence of aflotoxin in this year's crop has created a number insurance issues for farmers.

Another rumor is that farmers must get their crop tested before they can begin harvest. [Randy] Boberg says that is not exactly true, “While that sounds great, there are not enough adjusters in the whole US to accomplish that.” He said farmers can make arrangements with their adjuster to have their grain tested in a number of ways and at different times, “In some cases the adjuster can pick up the samples at the elevator, or the farmer can leave a strip standing in the field for the adjuster to test at a later date.”
Read the entire article here: Misconceptions Abound on Aflotoxin Crop Insurance Coverage.

The aflotoxin issue stresses some of the best practices farmers should follow when dealing with losses potentially covered by crop insurance, or really any insurance. These are:
  1. Always timely notify your insurer of a potential loss. Even if the loss in unknown, uncertain, or contingent, it is better to notify your insurer than wait too long and potentially lose all coverage. 
  2. Your agent is not your insurer. Your agent is typically a broker, a middleman between you and your insurer. If your agent says a claim is not covered, it may pay to get a second opinion from an attorney.
  3. The policy language controls whether a loss is covered, not what your agent or adjuster tells you. The Hoosier Ag Today article points out that there may be many different interpretations by different insurers of the same policy language. While that may be true, those different interpretations highlight the vagueness or ambiguities that exist in crop insurance policies (and other policies). One of the cardinal rules of insurance coverage law is that ambiguities are construed in favor of coverage. 

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