How does Hail Endorsement on Crop Ins work?

[Ron]

Just wondering how it works in Alberta?
I always take the spot loss endorsement but have never had a loss big enough to drop me below my overall coverage before.
Talking with the verifier today who I finally met up with to measure my bins (way easier now that they are empty, just math from the permit book) and he says that if you drop below your coverage on the entire crop that crop insurance works separately from the spot loss hail? Still not sure I believe him cause it sounds like a double payout (I got spot loss totalling 45% of my total coverage and according to his math I will be getting crop insurance payout for another 55% after the adjustments for tough grain and frost. The production to count was about 50% of the coverage kg).
Is this correct?
He told me in November that there was money coming to me but I assumed it was 5 or 6 hundred bucks and wasnt in a hurry.

[dfarms11]

Sorry to say but that doesn't sound right. With the hail end, if you have enough hail to trigger a crop ins pmt, You get a deduction off of your hail end pmt of some sort. I would phone your district office to confirm. With the situation you had, you would have been better off not taking the hail end. and buying straight hail. When you buy that way, they are 2 separate policies therefor you would get paid by both. It doesnot work that way with the hail end.

[TOM4CWB]

Ron,

Your 'varifier' is right.

However you cannot get total payout for more than your gross coverage per acre... but can get combined total of up to that amount.

Because hail is specific spot hail loss... $ per acre coverage and not a production insurance farm average (bu/ac); it is only fair that each policy pay out seperate.

Otherwise no one would take hail insurance fro AFSC... as hail is hail... and when other line hail companies pay and those policies/coverages wouldn't be subtracted from production insurance payouts; why should AFSC spot loss coverage be any different? You pay a seperate premium for the coverages.

[dfarms11]

now are you talking hail endorsment on crop ins, or a straight hail policy?

[Ron]

http://www.afsc.ca/doc.aspx?id=3447

This is from page 4 and I think the way I read it Tom is correct? You can get paid up to the total coverage partial from spot loss and partial from crop insurance, you cant go over 100% though.



Examples of Hail Endorsement Payments:
• assume 100 acres;
• production guarantee of 350 kg/acre;
• total coverage 35,000 kgs (100 x 350);
• elected $0.125/kg price option; and
• total dollar coverage is
35,000 kgs x $0.125/kg = $4,375.00
Scenario A
(40% hail loss; harvests 20,000 kg)
• Hail Endorsement payment
Loss is 350 kg x 100 acres x 40% =
14,000 kg x $0.125/kg = $1,750.00
• Basic production payment
35,000 kg coverage - 20,000 kg harvested =
15,000 kg shortfall @ $0.125 kg = $1,875.00
• Total payment $1,750.00 $1,875.00 = $3,625.00
Scenario B
(40% hail loss; harvests 6,000 kg)
• Hail Endorsement payment
Loss is 350 kg x 100 acres x 40% =
14,000 kg x $0.125/kg = $1,750.00
• Basic production loss calculation
35,000 kg coverage - 6,000 kg harvested =
29,000 kg shortfall x $0.125/kg = $3,625.00
Total payments from all sources cannot exceed dollar
coverage ($4,375.00) under the basic policy, and $1,750.00
has already been paid under the HE.
This means only the remaining coverage of
$4,375.00 - $1,750.00 can be paid under the basic policy.
The basic Production Insurance loss is limited to $2,625.00

[Ron]

Just talked with AFSC. Tom is definately correct, the spot loss hail coverage (hail endorsement) pays on the storm and if your total production is under your coverage level you will get paid again.
Definately worth it for the hail endorsement (I know the double payment doesnt sound right but I phoned and specifically asked).

[poorboy]

Just remember that in a huge storm that covers most of your farm and has damage 70-80% or greater you will really only collect once on the hail rider/crop insurance where as a separate hail policy and just crop ins will get you 2 payments

Hail riders work great in small storms, but are not as nice in a total devastation hail storm.