Grain Corn Insuring Agreement 2024

Coverage is a fundamental part of any insurance Policy and is based upon a long-term average yield.

a. Individual Coverage: is based on a minimum of five years of records. Crops with fewer than five years of records will be considered to be in the start-up phase.

b. Start-up: Missing yields are filled in with the historical average yield for the townships in which the farm is located. If the Insured does not have any yield records available, Coverage will be based entirely on the historical average for the township(s) where the farm is located.

c. Average Yield: An Insured’s average yield for a crop type is based on the average of the yield records AFSC has recorded for the crop. Yield records are gathered in different ways, including:

i. Harvested Production Reports (HPR) provided by the Insured;

ii. Yield information gathered by AFSC adjusters who visit the farm; and

iii. Production reviews conducted by AFSC adjusters to confirm the accuracy of HPR information.

d. One-year lag: Actual yields are not available immediately for use as it takes time to gather and verify information. Yields produced and reported in the current year will not be available to calculate Coverage for the following year; it will first be used to set Coverage the second year.

Rules for yield records use:

i. A blend of available yield records and the historical yields for the Risk Area in which the Insured farms when there are four or fewer yield records available.

ii. The average of up to 15 of the most recent yield records for a crop when there are five or more yield records available.

iii. For Insured Crops that are less than 30 acres, the Harvested Production for the Insured Crop will be excluded from the calculation of the Insured’s Coverage.

a. For most crops, due to improvements in varieties and management practices, yields generally increase over time. In order to ensure that individual coverage reflects this trend, individual yield records are adjusted by a trend factor. Older yield records will be increased more than recent yield records. Adjustments are made by multiplying individual actual or cushioned yields by a trend factor. The trend factor is an amount which reflects the average annual increase in yield for a specific crop in a specific Risk Area.

a. Cushioning has the effect of stabilizing Coverage by reducing year-to-year fluctuations. Unusually low yield records are adjusted upward for the purposes of calculating the Final Individual Normal Yield. When a crop yield is less than 70 percent of the Final Individual Normal Yield, the actual yield is cushioned and replaced by 70 percent of the Final Individual Normal Yield for that crop for that Crop Year. The cushioned yield is used to set future Coverage whereas the actual yield is used to calculate an Indemnity.

a. Insurable Crop(s) grown on irrigated land must meet the following conditions:

i. those crops are declared as irrigated;

ii. there is an adequate source of water;

iii. the Insured has reliable irrigation equipment;

iv. adequate irrigation water is applied on a timely basis; and

v. the Insured maintains an up-to-date log showing the dates and approximate amounts of rainfall and irrigation water applied to each Insured Crop.

b. AFSC may apply Uninsured Causes of Loss if:

i. the Insured fails to fulfill all or part of the conditions in subsection (a) above; or

ii. drought is considered by AFSC to be a contributing cause of loss.

a. AFSC, in its discretion may limit, restrict, exclude or deny Coverage, in whole or in part, for the following:

i. in the event AFSC determines by the application deadline that an Insured has a high risk of Production Loss;

ii. where the land is subject to repeated flooding or where excess moisture is a recurring problem;

iii. major changes are made in management practices, acreage, land location, confirmed yields or experience;

iv. the Insured makes a change that increases AFSC’s risk without notifying AFSC thereof and AFSC accepting the same risk; or

v. any other practice or action taken by the Insured that would prove detrimental to or limit production of the Insured Crop.

a. Spring Insurance Price: In the spring, AFSC forecasts expected crop prices for the coming Crop Year.

b. Fall Market Price: In the fall, AFSC reviews the pricing using specific methodologies, as described in the table below to determine whether the crop’s Fall Market Price is substantially lower or higher than the Spring Insurance Price and sets Fall Prices accordingly.

c. Variable Price Benefit: is offered to protect against price fluctuations between the Spring Insurance Price and the Fall Price. Refer to the Benefits document for information.

Market Price Methodology Table

In the event that price information originating from published Fall Market Price methodology for an Insurable Crop(s) is not available or stops being available during the Fall Market Price period, at its best discretion, AFSC maintains the right to develop and implement an alternate price methodology for Fall Market Price determination to replace or augment pricing for that crop in that year.

a. Minimum Premium: There is a minimum $25 of total Premium required per insurance Policy.

b. Rates: Premium rates are set annually based on historical losses and reflect AFSC’s risk of future production losses. Premium rates may vary by Risk Area and Coverage Level. The Insured’s Premium is calculated by multiplying the Dollar Coverage by the Insured’s share of the premium rate and applying any applicable premium adjustments.

c. Cost Share: Federal and provincial governments support AgriInsurance programs by paying all administration expenses and sharing premium costs with the Insured.

d. Adjustments & Discounts:

a. Application: New clients must apply for insurance on or before April 30 and AFSC will evaluate eligibility for insurance. Producers are required to demonstrate their legal, financial and operational independence, and can contact AFSC for application documents.

b. Renewal Process: Insurance remains in effect from year to year, therefore an Insured who elected insurance in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in March. The Insured is responsible to review the information and if changes are required, complete a change request form online or return the form to an AFSC insurance representative by mail, fax, email, in person, or request changes by phone, no later than April 30.

c. Coverage Level: Coverage Levels of 50, 60, 70 or 80 percent can be elected.

d. Declared Acres: are the total number of acres seeded and those intended to be seeded to Annual Crops, including Silage and Greenfeed crops, whether the acres are to be insured or uninsured.

e. Hail Endorsement: offers spot-loss coverage and may be elected on a crop by crop basis at 60, 70 or 80 percent Coverage Levels by April 30. Refer to the Hail Endorsement Insuring Agreement for additional information.

f. Auto-Elect Straight Hail Insurance: may be elected on a crop by crop basis by April 30. When elected, a two percent premium discount will be applied on the Straight Hail Statement of Coverage and Premium.

a. The Insured is required to submit a Notice of Loss to initiate a claim. The required timeframes for the Notice of Loss and the deadline to initiate a claim are as follows:

i. Unseeded Acreage Benefit: via the Land Report on or before June 20.

ii. Harvested Production Report (HPR): on a form acceptable to AFSC once harvest is complete and not later than November 15.

iii. Unharvested Acreage Benefit: via the HPR, report the number of unharvested acres by November 15, last date to report is on or before December 31.

iv. Post harvest claim: via the HPR, losses must be reported before December 31 in the calendar year in which the loss is claimed to have occurred.

b. If the Insured is late in filing a Notice of Loss AFSC may reject the claim.

a. Upon receipt of a claim for loss:

i. where AFSC processes a claim, AFSC will serve the Insured with a Statement of Loss.

ii. where AFSC’s process is to conduct an inspection, following the inspection, AFSC will serve the Insured with a copy of the Inspection Report.

b. If the Inspection Report results in no payment, or if as a result of the Inspection Report the claim for loss is withdrawn by the Insured, the Inspection Report will be considered to be the final Statement of Loss for the claim by the Insured and no further Statement of Loss will be issued by AFSC.

c. If the Insured does not, within seven days of service of the Inspection Report, advise AFSC of the Insured’s disagreement with the report or does not request a re-inspection, AFSC will issue the Statement of Loss according to the Inspection Report.

d. When AFSC has conducted an inspection and issued an Inspection Report and a Statement of Loss, and the Insured has a dispute relating to the Statement of Loss and requests a re-inspection, AFSC will only review the Statement of Loss if the Insured notifies AFSC of the request for a re-inspection within seven days from the day that the Insured is served with the Inspection Report.

a. After an inspection, pursuant to Section 8.02 (c), if the Insured, within seven days of service of the Inspection Report:

i. advises AFSC of the Insured’s disagreement with the report; and

ii. requests a re-inspection:

AFSC will conduct a re-inspection, and no Statement of Loss will be issued until after the re-inspection has been conducted. AFSC reserves the right to charge a fee for Insured requested re-inspection of crops, or re-grading of samples.

a. Acreage of Insured Crop(s) Put to Another Use must first be released by AFSC.

b. The Insured is required to contact AFSC five days in advance of putting an Insured Crop to a use other than combining to request an appraisal and release of acres. The Insured will provide the following information:

i. The number of acres intended to be put to an alternate use;

ii. The reason for the alternate use;

iii. An estimate of the yield.

c. Depending on the estimate of yield, the acres may be released from an AFSC branch office, or an adjuster may complete a field inspection to determine the yield appraisal before acres are released.

d. AFSC may defer the appraisal on a damaged Insured Crop that the Insured intends to Put to Another Use.

e. When the Insured has accepted the Appraised Potential Production on any portion of an Insured Crop, no further appraisal will be made on that portion unless, and at the sole discretion of AFSC, substantial damage occurs before the Insured Crop can be Put to Another Use within a reasonable period of time.

i. An additional inspection may be subject to a re-inspection administrative fee.

f. Where an Insured Crop is Put to Another Use without first being assessed and/or released by AFSC, AFSC will deem the Appraised Potential Production to be zero, and the Uninsured Causes of Loss to be equal to Coverage on acres Put to Another Use.

g. The Insured must not dispose of an Insured Crop or Put to Another Use without AFSC releasing acres, as it may negatively impact their insurance. Once authorized by AFSC, the Insured may leave Inspection Strips or exclosures if putting acres to another use.

h. Where Inspection Strips or exclosures are authorized by AFSC, the Insured is required to leave Inspection Strips or set up appropriate exclosures, or AFSC will deem the Appraised Potential Production to be zero, and the Uninsured Causes of Loss to be equal to Coverage on the acres Put to Another Use.

a. Inspection Strips are representative standing strips or swaths of the Insured Crop in such measurements as required by AFSC to determine the crop’s production potential. Inspection Strips are to be left in from the edges of the field a distance of about one-third of the width of the field, for the length of the field and a minimum of ten feet in width, for inspection by AFSC.

i. On fields less than 100 acres, two strips are required.

ii. On fields of 100 acres or more, an additional strip must be left in the middle of the field.

iii. On fields of 100 acres or more that span multiple quarter sections, treat each quarter section as a separate field; for fields less than 100 acres, two strips are required; for fields greater than 100 acres, three strips are required.

b. Exclosures are representative sites of the crop that are fenced off and are used when the crop is being pastured as the Insured is unable to leave representative Inspection Strips.

i. A minimum of two sites are required for fields up to 40 acres,

ii. A minimum of one additional site is required for every additional 40 acres in that item.

a. The procedures set out in AFSC’s adjusting procedure manuals shall be used in the assessment of production and insurable loss of an Insured Crop.

a. When Uninsured Causes of Loss are determined, claims may be reduced or denied, reflecting the amount of production and/or Quality Loss due to the uninsured causes. The acres remain insured and full Premium remains payable. Common examples where Uninsured Causes of Loss may be applied include, but are not limited to:

i. unapproved, untimely or improperly applied products or methods for the:

1) control of weeds,

2) control of insects,

3) control of plant diseases,

4) enhancement of plant development;

ii. inadequate machinery, labour or failure to complete repairs to equipment on a timely basis;

iii. machinery and equipment failure due to mechanical defects or improper operations;

iv. damage to an Insured Crop from fertilizers, herbicides, pesticides, fungicides, soil or crop additives or any other product where the damage was caused by drift, residue, improper direct application or improper use of product;

v. untimely harvest practices for the area and the crop;

vi. improper harvest management;

vii. damage by domestic animals or poultry;

viii. neglect or theft of the Insured Crop;

ix. negligent or wrongful acts of a third party (e.g. spray drift or stray animals);

x. damage after an inspection by AFSC or while in storage, including heating;

xi. grade reduction before an inspection by AFSC if stored production is not weather protected; or

xii. any Designated Peril deemed avoidable by AFSC.

b. If AFSC pays no Indemnity because of an Uninsured Cause of Loss, AFSC will not refund any portion of the Premium and the Insured is not relieved from paying any outstanding Premium.

a. Service of the Inspection Report or a Statement of Loss may be effected on the Insured by:

i. personal service;

ii. ordinary mail or registered mail, in which case service is deemed to have been effected;

1) seven days from the date of mailing if the document is mailed in Alberta to an address in Alberta, or

2) 14 days from the date of mailing if the document is mailed to an address located outside of Alberta; or

iii. by facsimile, email or other electronic means in accordance with AFSC’s most recent records for the Insured.

b. Where there is more than one Insured in respect of the crop loss for which an inspection has been made, service of the Inspection Report or Statement of Loss on one of the Insured is deemed to be service on all the Insureds.

a. To facilitate tax planning, Insureds can choose in advance to defer Indemnities to the following tax year. There will be no recourse to defer payment once a payment has been issued. Deferred Indemnities will not be applied to outstanding Premiums/balances until the deferred date and interest will continue to accrue.