It will take months to calculate the damage Hurricanes Harvey and Irma unleashed this summer on the states of Texas, Louisiana, and Florida: dozens of lost lives, hundreds of thousands of destroyed homes, tens of billions in property damage and untold suffering and disruption. Some losses will take years to mend, some can never be mended at all.
For farmers, once conditions clear enough to inspect fields, a first order will be to assess losses to their crops. For many, this disaster, as bad as it was, could have been worse. Texas farmers had been anticipating records crops in 2017 before the storm struck. About 75 percent of rice and 15 percent of cotton was harvested or ready for harvest. Cotton modules already dotted many fields. But much remained exposed, and Harvey’s fierce winds and unprecedented 30-plus inch rains wreaked havoc on rural infrastructure. Cotton gins and rice storage facilities suffered on a wide scale, potentially blocking many crops from reaching markets even if they survived the immediate hit.
In Florida, some $1.2 billion in crops stood exposed at the time Irma struck. Damage there too could be wide and deep.
In picking up the pieces from this historic disaster, farmers will learn first-hand the benefits as well as the limitations and pitfalls of protection under USDA’s Federal crop insurance program, run by USDA’s Federal Crop Insurance Corporation (FCIC). FCIC crop insurance can be a blessing in a crisis like this, providing certainty of timely payment at pre-agreed levels. Its financial guarantees are tailored to individual farm production histories and reflect deductibles chosen by the farmer. Its payments are based on contracts; no need to rely on politicians. And once claims are filed, checks normally go out within thirty days.
But FCIC crop insurance also has limitations. Its indemnities are not designed to make farmers 100 percent whole. Rather, its policies contain deductibles to ensure that farmers have “skin in the game” and an ability to control cost by choosing lower guarantees. FCIC crop insurance is also tightly controlled by often-complex rules and procedures applied far more strictly than commercial insurance (a result of taxpayer subsidies and related government oversight).
Navigation of the crop insurance claims process requires care and patience. Here are a few basics:
Should you talk to a lawyer about a crop insurance claim? In the large majority of cases, no, there is no need. Crop insurance loss adjustors and company staff are highly trained professionals who generally do a great job under tough conditions. But if you have a disagreement over a claim that is large enough to require arbitration (the normal venue for crop insurance disputes), or if you feel the company truly acted unreasonably, that’s the time to speak with a lawyer, and to do it quickly. Beyond handling actual legal challenges, a knowledgeable attorney with FCIC claims experience can give you a quick, realistic assessment as to the seriousness of the problem and the strength of your argument, while also helping you avoid early technical or procedural mistakes that can jeopardize your claim in the long run.
To all our friends in the hurricane zones, we wish you the best, and hope you weather the storms safely and with a minimum of damage.