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Grand Rapids, MI | OK, wheat adjustment for damage gets tricky, but I will give you an overview. It is probably not possible on this forum to give you all the details, so talk to your agent ASAP. Hopefully you have a good one because I have heard a lot of misinformation on this topic. If you don't think you are getting the right answers or they don't match what I explain here, drop me a note and I can help you work through it.
First, the question about "totaling it out" The crop insurance company (AIP) will consider it a total loss if the wheat has "Zero Market Value" This means no one in your local market will buy it AND any buyers in distant markets will not pay enough for the wheat to pay for the additional shipping. In order to get the claim, you need to destroy the wheat in an approved method.
So...if your wheat does have some value (I suspect it is still worth something to someone for feed) we need to determine what section of the SPOI applies.
For excessive defects, any Damage % less than 35% will be in "Section A." Your production to count for insurance will be reduced anywhere from 1% (at 15.01% damage) to 20.6% (at 35% damage) There are additional reductions in production to count for US Grade and Test Weight that can add together with the damage reduction. All these charts are in your SPOI which should be attached to your policy. If you dont have it I can send it to you or ask your agent for it.
If your damage is over 35% (or TW below 44) then "Section B" applies. Secton B reduces production to count depending on what you do whth the wheat. If you sell the grain to a disinterested party within 60 days the claim will be based on the Reduction in Value (RIV) For example, if the local market is paying $6 for good quality wheat, and will pay you $2 for yours the RIV is .666 and the adjuster will only count 1/3 of the actual wheat you harvest. The reduction for wheat unsold, sold to an interested party, and remaining unsold 60 days after the end of the insurance period will be 50% (This could be good or bad depending on your situation, you may want to plan to use it to your advantage one way or the other)
"Section C" deals with substances injurious to human or animal health (e.g. Vomitoxin) I am not going to get into that here, but know there are seperate rules.
One last point: There are some very specific rules on who must take the sample, who must grade it, etc. I would not harvest any grain until you have talked with the adjuster and come up with a plan. I would prefer to have that plan in writing (think have him/her send it to you in e-mail) or you confirm a verbal plan by e-mail or letter.
Hopefully this helps, I was just reviewing it for some of my crop insurance clients that have wheat in MI.
Loren
Edited by lorenk 7/28/2009 19:06
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sprouted wheat
