The drought that has devastated the Midwest, Corn Belt, and America’s prime farmland could cause a record number of agriculture and crop insurance claims from affected farmers. According to the economic predictions from many experts, it is believed that this year will set a record for farmers to file insurance claims.
Many farmers who have a good amount of insurance coverage may be giving up their crops early – opting to plow them under – instead of trying to save the withered crops. Some experts are recommending that farmers do this and claim a total loss rather than produce a smaller harvest.
This option is only available because of the federal backed crop insurance, under which some farmers have larger polices that protect revenue. However, opponents are concerned that this move will increase the price of corn by 50 percent.
Yet advocates say this is why some farmers have the higher level of coverage, so that they don’t have to continue to dump money into withered crops hoping to save them. If a farmer has a harvest price option on his revenue protection policy, he can get paid for the crops that he would have harvested at the price he would have gotten at market, even if his crop is plowed under.
Not all farmers are looking to cash in on their insurance, as many farmers are still fighting to save their crops.
If you have decided that your crops cannot be saved, make sure you notify the insurance company of crop damage within 15 days and wait to receive a confirmation from your insurance company before you plow your field under. They will send an insurance adjuster to visit your farm to assess the damage.
While it is too early to tell the exact final damage, over $446 million in insurance costs have been reported as of July 16, 2012, compared to $230 million in 2011.