Navigating Hurricane Crop Insurance for Maximum Protection

Crop insurance can be a lifesaver for farmers who suffer losses due to hurricanes. The US Department of Agriculture's (USDA) Risk Management Agency (RMA) administers the National Crop Insurance Program, which provides financial protection to farmers.

To be eligible for crop insurance, farmers must be operating a farm or ranch that is at least 30 acres in size. This is a key requirement to qualify for coverage.

Farmers can choose from a variety of insurance plans, including Actual Production History (APH) and Yield-Based plans. APH plans pay out based on a farmer's historical yields, while Yield-Based plans pay out based on the actual yield of the crop.

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To be eligible for hurricane crop insurance, you need to have an insurance policy under the Basic Provisions with the same insurance provider. This is a must-have requirement for both HIP-WI and the Tropical Storm (TS) option.

You can insure up to 70 different crops under the HIP-WI Endorsement, which is available in counties near the Gulf of Mexico and the Atlantic seaboard, as well as Hawaii. This includes both Catastrophic (CAT) and additional coverage policies.

To elect HIP-WI, you must do so on or before the underlying crop insurance policy sales closing date (SCD). You'll also need to choose a HIP-WI coverage percentage.

The Tropical Storm (TS) option has its own set of requirements, which includes meeting all eligibility requirements for HIP-WI. You must also elect TS on or before the HIP-WI sales closing date.

Here are the eligibility requirements for HIP-WI and the TS option:

If you elect to have HIP-WI, there's a 14-day waiting period before coverage begins.

This waiting period starts 14 days after the sales closing date, and if your underlying crop policy also has a waiting period, they'll run concurrently.

A loss event that occurs within this 14-day period will have HIP-WI coverage based on the previous year's coverage percentage and range.

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The waiting period for protection is an essential aspect of HIP-WI coverage. It's a 14-day waiting period that begins after the Sales Closing Date.

If you elect HIP-WI coverage in the initial year, coverage won't start until this waiting period is over. This means that if a loss event occurs during these 14 days, your coverage will be based on the previous year's coverage percentage and range.

The waiting period applies to the initial year of HIP-WI coverage only. In subsequent years, if you increase your coverage, the increase won't take effect until 14 days after the Sales Closing Date.

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The HIP period is a crucial aspect of insurance protection. It determines when your coverage begins and ends.

The HIP period, or HIP-WI Insurance Period, starts on the later of the sales closing date or earliest planting date of the crop.

For example, if you close the sale of your crop on May 1st, but the earliest planting date is April 15th, your HIP period begins on April 15th.

The HIP period ends on the earliest of the end of insurance date or termination date, if there is no end of insurance date for the crop.

Here's a breakdown of the HIP period timeline:

Understanding the HIP period is essential to ensure you have adequate protection for your crop.

Hurricane crop insurance offers several insurance options to farmers, including Yield Protection (YP) and Revenue Protection (RP) policies. These policies can provide financial protection against crop losses due to hurricanes.

The Yield Protection policy covers crop yields, paying out if yields fall below a certain percentage of the expected yield. For example, if a farmer expects to harvest 100 acres of corn but only gets 80 acres due to a hurricane, the policy would pay out the difference.

Revenue Protection policies, on the other hand, cover the revenue generated by the crop, taking into account factors like price and yield. This can provide more comprehensive protection for farmers, especially if the hurricane causes a significant drop in crop prices.

Endorsements can also be added to these policies to provide additional coverage. For example, the Harvest Price Option (HPO) endorsement can increase the revenue guarantee if the harvest price is higher than the projected price.

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The Wind Index (HIP-WI) Endorsement is a valuable addition to your crop insurance policy, especially for farmers living in hurricane-prone areas.

This endorsement covers a portion of the deductible of your underlying crop insurance policy when a named hurricane hits your county or an adjacent one.

The National Hurricane Center (NHC) at the National Oceanic and Atmospheric Administration (NOAA) publishes the areas affected by sustained hurricane-force winds, which determines the coverage.

Effective for the 2023 crop year and forward, this endorsement now includes an option to cover a tropical storm weather event, providing even more protection for your crops.

This means you can have peace of mind knowing you're protected from both hurricanes and tropical storms.

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Supplemental coverage can be combined with other options to provide additional protection for your farm or business. The Supplemental Coverage Option (SCO) can be paired with HIP-WI coverage.

This combination allows for more comprehensive risk management. By combining SCO with HIP-WI, you can better manage potential losses.

The Stacked Income Protection Plan (STAX) can also be included when acreage is insured by a companion policy. This provides an additional layer of protection for your business.

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The HIP-WI Endorsement pays out in certain circumstances. If a named hurricane hits your area, causing sustained hurricane-force winds of 64 knots (74mph) or greater, you'll receive the full value of the endorsement.

The counties where payments occur will be specified in the actuarial documents. This information will help you understand which areas are eligible for the full payout.

You might experience reduced revenue or yield due to hurricane-related causes, but still not receive an indemnity under HIP-WI. This can be a complex situation, but it's essential to understand the terms of your insurance.

Half of the value of the HIP-WI Endorsement is paid when a tropical storm hits your area. This happens when the county or adjacent county is within the area of a tropical storm with sustained surface wind speeds of 39 mph (34 knots).

To qualify for this partial payout, you'll need at least six inches of total precipitation over four consecutive days. This can be determined using data from NOAA and as calculated by RMA.

Note that 5.900 inches and above of rainfall will be rounded to 6 inches. This is an important detail to keep in mind when assessing your eligibility for the partial payout.

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An indemnity is due when the county loss trigger is identified for the insured county. Losses under HIP-WI will be paid within 30 days after Federal Crop Insurance Corporation (FCIC) releases the list of counties identified as meeting the county loss trigger.

The process is designed to be efficient, with payments made quickly after the trigger is identified. This helps farmers get the support they need in a timely manner.

Claim settlement is a crucial part of the claims process. An indemnity is due when the county loss trigger is identified for the insured county.

The county loss trigger is a specific condition that must be met before losses can be paid out. This trigger is determined by the Federal Crop Insurance Corporation (FCIC).

Losses under HIP-WI will be paid within 30 days after FCIC releases the list of counties identified as meeting the county loss trigger. This ensures that affected counties receive their compensation in a timely manner.

After a hurricane or other natural disaster, farmers should take immediate action to protect their crop insurance claims. Contact your crop insurance agent within 72 hours of damage discovery and follow up in writing within 15 days.

You'll need to report hurricane-related damage to your agent, and they'll guide you through the process. Don't destroy any of your crop, don't disk, and don't replant – wait for the claims adjuster's clearance.

To initiate the claims process, call your crop insurance agent and provide them with all the necessary information. You'll need to review your crop insurance policy, including your elected options and endorsements, and gather records such as planting records, seed purchases, and sales records.

Take pictures and document the extent of damage as thoroughly as possible. This will help your agent and the claims adjuster assess the damage and determine the extent of your loss.

Here are the key steps to follow:

Be patient and plan for potential delays in receiving your indemnity payments. The claims process can take time, but following these steps will help ensure you receive the compensation you're entitled to.

The USDA has been working hard to help producers recover from disasters and prepare for future ones. USDA's Risk Management Agency (RMA) introduced a new crop insurance hurricane endorsement called Hurricane Insurance Protection – Wind Index (HIP-WI) which covers a portion of your underlying crop insurance policy's deductible when your county is within or adjacent to the area of sustained hurricane-force winds.

HIP-WI covers 70 different crops and is available in counties near the Gulf of Mexico and the Atlantic as well as Hawaii. This is a huge relief for farmers who live in these areas and are prone to hurricanes.

The Wildfire and Hurricane Indemnity Program Plus (WHIP+) helped those affected by natural disasters in 2018 and 2019, including hurricanes Michael, Florence, and Dorian and other natural disasters. This program provided much-needed support to farmers who were struggling to recover from the devastating effects of these disasters.

The WHIP+ linkage requirement has contributed to a 60% increase in crop value covered for citrus crops in Florida alone. This is a significant increase, and it's a testament to the effectiveness of this program.

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For the 2020 crop year, 87% of insured orange trees were covered by buy-up policies versus 18% in crop year 2018. Similarly, 92% of acreage insured under the orange fruit policy is covered by buy-up for the 2020 crop year versus 50% in 2018. This increased coverage is a huge relief for farmers who are looking for ways to mitigate their risk.

If you live in a county where a hurricane hits, you might be eligible for a special payment under HIP-WI.

The payment is triggered by sustained hurricane-force winds from a named hurricane, as reported by the National Hurricane Center.

Your farm may experience reduced revenue or yield due to hurricane-related causes, but you won't receive an indemnity under HIP-WI.

You're not required to file a notice of loss, even if your farm is affected by a hurricane.