OVERLAND PARK, KANSAS, July 18, 2012 \u2013 As the drought spreads and attention turns to worsening crop conditions in farm country, the nation\u2019s crop insurers today reassured farmers that companies will have the money necessary to quickly pay out claims in 2012, even amid record payouts last year.<\/p>\n
For every dollar of premium that insurance companies write, they have a regulatory requirement to have the private financial backing to cover catastrophic losses. Each year, the Federal Crop Insurance Corporation reviews and approves every company\u2019s plan of operations to ensure that adequate capital is available, explained Tom Zacharias, president of National Crop Insurance Services (NCIS), the industry\u2019s trade association.<\/p>\n
\u201cWe\u2019ve always been there for our farmer customers when they\u2019ve faced tough times in the past and we\u2019ll continue to be there,\u201d he said.<\/p>\n
Zacharias said 2011, which was marked by widespread weather-related loss and a record $11 billion in indemnity payments, should serve as a good model for what farmers can expect this year.<\/p>\n
In 2011, most payments to farmers on the policies they purchased were processed within 30 days of claims being finalized. Such efficiency required a highly trained and skilled force of agents and claims adjusters, Zacharias pointed out.<\/p>\n
There are about 5,000 certified crop insurance adjusters in the country who are already visiting farms and assessing damage. More than 2,000 of these adjusters are expected to attend NCIS sponsored training sessions this summer where part of the focus will be on this year\u2019s droughts.<\/p>\n
Although indemnity payments on the 2012 crop are already being made, NCIS is unable to predict the extent of likely damages this year because reliable information about the number of policies sold in 2012 and the acres covered by those policies will not be available until mid-August. Final indemnity estimates will take even longer to filter in.<\/p>\n
In the meantime, Zacharias offered advice for farmers who are facing weather disaster. If producers think they have a loss on an insured crop, they must:<\/p>\n
1. notify their crop insurance agent within 72 hours of the initial discovery of damage;<\/p>\n
2. continue to care for the crop and protect it against further damage, if possible; and,<\/p>\n
3. obtain consent from the insurance company prior to destroying any of the insured crop.<\/p>\n
\u201cCrop insurance is working well, and it will prove to be instrumental to agriculture\u2019s ability to rebound this year,\u201d Zacharias concluded. \u201cAs Congress debates a new Farm Bill and as the administration considers future changes, we hope they will see our impressive track record and do no harm to crop insurance.\u201d<\/p>\n
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