By: Trevor Troyer, Vice President Agricultural Risk Management, LLC
So, you have opened up a claim in your vineyard due to freeze/frost damage. What’s next? When do you get paid? How much do you get? When is the adjuster going to come out? How does the claims process work? What do you need to provide to the adjuster that shows your loss?
I wrote a month ago about when you should open up a claim. To summarize, you should open up a claim any time that you might have a loss. You should not wait to see if you have a loss but open the claim up right away. The loss has to be caused by an insurable trigger.
The Causes of Loss per Grape crop provisions are:
1) Adverse weather conditions;
2) Fire, unless weeds and other forms of undergrowth have not been controlled or pruning debris has not been removed from the vineyard;
3) Insects, except as excluded in 10(b)(1), but not damage due to insufficient or improper application of pest control measures;
4) Plant disease, but not damage due to insufficient or improper application of disease control measures;
7) Volcanic eruption; or
8) Failure of irrigation water supply, if caused by an insured peril that occurs during the insurance period.
Adverse weather conditions could be anything that could cause damage to your grapes. For example; drought, frost, freeze, excess moisture etc. Wildlife could be bird damage, deer etc. Fire would also include smoke taint as that is a result of a fire. Crop insurance does not cover, inability to sell your grapes because of a buyer’s refusal or contract breakage. It also doesn’t cover losses from boycotts or pandemics. Overspray or chemical damage from a neighboring farm is not covered either.
An average of your historic production is being covered per acre per variety. You can cover 50% to 85% of your production average. Obviously, the premium for 50% is cheaper than the premium for 85%. If you chose 75% coverage then you have a 25% production deductible. If you have a 4 ton per acre average then you would be covered for 3 tons per acre. Your deductible would be 1 ton an acre. You would have to have a loss over 1 ton per acre to have a payable claim.
At the time you sign up for crop insurance you report your past production per variety and vineyard location. We do not need any weigh tickets, pick records, or sales receipts from wineries at this time to verify your production. You will be asked to show this year crop year’s production records during a claim. The adjuster may want to verify past production records as well. It is important that when we set up your production database with your history that you have records to prove the data.
Per the Common Crop Insurance Policy – Basic Provisions; Production record – A written record that documents your actual production reported on the production report. The record must be an acceptable verifiable record or an acceptable farm management record as authorized by FCIC procedures. FCIC is the Federal Crop Insurance Corporation.
Here are some of the items that may be needed for a claim. A. Supporting Records Settlement sheets, sales receipts, machine harvest records, certified scale records, pick records and final or year-end statements from a winery, cannery or processor must indicate net paid tons of Grapes delivered by variety. Converting gallons of wine to tons of grapes does not qualify as acceptable records. – Crop Insurance Handbook (CIH) 2023. These records would also be needed to support your historical average.
It is important to keep these items for the future as well. It is not enough that you have your tonnage written down. You need weigh tickets, receipts etc. These documents need to be verifiable, not in a spreadsheet on your desktop computer.
It can get tricky if you are “vertically integrated” and grow grapes and make wine yourself. You might not have third party weigh tickets or sales receipts. Some wineries sell some of their grapes and make wine with the rest. Some of the records for the adjuster could be sales receipts and the rest would need to be certified scale weight records.
The scale has to be certified though.
B. Certified Scale Weight Records Certified scale weight records alone are considered to be acceptable production records, unless the CP requires a pre-harvest appraisal and/or records of sold production. Certified scale weight records must be legible and include all of the following to be acceptable.
1) The insured’s name.
2) The name of the crop.
3) The date of harvest or the date weighed.
4) The unit number or the location of the
5) The practice, type, and crop year.
6) The quantity/weighed production. For wineries that process their own grapes, the weight can be recorded on the form used for reporting to the Alcohol and Tobacco Tax and Trade Bureau. – Crop Insurance Handbook (CIH) 2023.
There is a lot of information on what is an “acceptable verifiable record”, much more than I can put in one article. For the full information on what is acceptable you can look at the Crop Insurance Handbook, the Loss Adjustment Manual and the Grape Loss Adjustment Standards Handbook. You can find all of these at the USDA Risk Management Agency’s website at www.rma.usda.gov
To run through the questions at the beginning. You have called your agent and opened up a claim. The adjuster will contact you in few days. They may want to see the damage right away or wait to see how much you harvested. I always recommend to vineyard owners to take pictures of the vineyard if the damage is visible. Once you harvest and production is verified by the adjuster, they will send the information in to be reviewed. Once approved you will be paid the difference of your guarantee (average of your historical production multiplied by your coverage level.)
I cannot stress enough the importance of keeping good records.