What is the Most Important Decision in Choosing Grape Crop Insurance?

man on phone in vineyard looking at crop damage

By: Trevor Troyer, 
Vice-President of Operations 
for Agricultural Risk Management

What is the most important decision in choosing grape crop insurance?  Is it which coverage level to choose?  Is it which insurance provider to use?  Is it whether to insure all your grapes or only those that are the most susceptible to adverse weather conditions?  Is it checking to make sure the company you are going with has a good adjuster? Is it making sure the insurance company is local?

  Those are all important questions to ask.   But how can you answer all those questions?   You would need years of experience and knowledge of all the insurance providers.  You would need to personally know the adjusters in your area.  More than likely you don’t know the answer to those questions.  That is why the most important decision in grape, or another crop insurance decision is having a good and knowledgeable agent.

  Why is this important?  A good crop insurance agent is trained in all the aspects of your specific crop.  He or she knows which coverage levels do the best for making sure that your grapes are protected.  They are not going to just sign you up on the cheapest plan to get a commission.  They will go over why they think you should have a certain level.  Coverage in Grape crop insurance goes from CAT (Catastrophic 50% coverage with 55% of the price per ton value) all the way to 85%.   Depending on how many acres and locations you have choosing the correct coverage level is vital.

  A good agent will also go over which endorsements would be suitable for your vineyard.  What is Yield Adjustment? Why is this important.  Do you have more than one location?  They should speak to you about Optional Units.  (Optional Units allow different locations to be adjusted separately at the time of a claim.  This way production from one location is not co-mingled and therefore causing a claim not to be paid or reducing the claim amount.)

  A good crop insurance agent also knows which Approved Insurance Providers, AIPs, are doing the best with your crop.  Some insurance companies focus on row crops.  Others focus on certain areas of the US.  While some of these might be available in your area, they may not be the best option for your grape crop insurance.  Currently there are 13 insurance companies that are approved by the USDA to service crop insurance policies.  All thirteen may not be available in your state.  For example, in New York state only 8 of these 13 companies are active. It is important to have a good insurance company.  But you are probably not going to be able to determine that unless your agent is guiding you with that.

  Having a good adjuster is important as well.  A good agent knows which approved insurance providers have been doing well with Grape claims and which have not.  Claims should all be done the same but sometimes you might get adjuster that is new to grapes.  This can cause problems.  Agents have to stay out of the claims process per rules by the USDA, but they can help you make the right decision on which company to go with based on past experiences. Your agent can help answer questions about your policy and how it relates to a certain loss.  They can also send you material on how claims are paid out and losses are calculated.  An agent cannot ride with you and an adjuster to look at your grapes.  An agent cannot send you claim documents etc.  But they can make sure you understand your policy and the claims process.  And most importantly they can put you with an insurance company that has good adjusters.

  There are a lot of moving pieces to a crop insurance policy.  Perennial crops are fundamentally more complicated than a row crop like corn, soybeans or wheat.   You need an agent that understand the complexity and can help you navigate coverages and options.  Crop insurance policies and options can change every year.  Your agent has to be up-to-date and aware of all changes.  Just because an agent has an insurance license and they can sell crop insurance does not mean they are knowledgeable.  It also doesn’t mean they understand grape crop insurance.

  While crop insurance coverage is the same from one insurance company to the next.  Premiums are also the same for the same coverage from any of the approved insurance providers.  This doesn’t mean that each policy is structured the same.  What endorsements have you added? Do you have QL, Quality Loss so you can use pre-quality loss production in your database? Do you have Basic or Optional Units? What about Contract Pricing? All these things can be the difference in getting a claim paid.

  You should ask your agent how long they have been selling crop insurance.  Do they work with a lot of perennials.  Do they have other grape policies.  Just because they are local does not mean they know grapes.  Sometimes the best option is a national agency that works with grapes across the US and in multiple states.  How long have they been working with vineyards in your state?

  The person that is most important in your grape crop insurance is your independent insurance agent.  The more knowledgeable they are the better.  This is the person you have to place your trust in.  He or she can guide you through the complexity and help you tailor a policy that best suits your needs and locations.

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