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Agriculture can be unpredictable. That’s why Agriculture Financial Services Corporation (AFSC) provides a suite of annual crop insurance programs to safeguard against production loss.

These programs provide:

  • protection for producers from financial losses due to circumstances beyond their control.
  • coverage for many types of operations including commercial, organic, pedigree seed and specialty cropping.

What’s New for 2020

  • Selected crops that were formerly offered coverage under the New Crop Insurance Initiative program are now eligible for coverage under Crop Insurance. Clients can insure commercial, pedigreed or organic dryland Hemp, commercial and pedigreed irrigated soybeans, as well as table and seed creamer potatoes under irrigated or on dryland acres. Reference the Insuring Agreements for specific eligibility requirements.
  • Water Allocation Restriction Benefit introduced: The Water Allocation Restriction Benefit supports clients who have their water allocation restricted by the provider during a crop year. This Benefit allows them to maintain their irrigation coverage provided a minimum of 50 per cent of the restricted water allocation is applied to insured fields.
  • Expansion of Risk Area boundaries: With more land being brought into production in the northern area of Alberta, the eligible land base for Risk Area 22 has been expanded to include additional townships. Risk area information can be found in the Maps for Annual Crops resource.
  • Organic crops price enhancement: AFSC and Organic Alberta have been working together for the past year to come up with improvements for determining organic spring insurance prices used for coverage. Prices from Organicbiz.ca will now be used in most cases to create the premium to conventional factor on an annual basis. If no recent price history is available from the Organicbiz.ca source, AFSC may use alternative sources to create a spring insurance price. The result will be a more annually relevant reflection of markets AFSC organic clients participate in.
  • Additional crops for New Crop Insurance Initiative: Intercropping intended for harvest will be insurable under the following three intercropping categories. The categories are based on the mixture of the crop types grown and include:
    • Intercrop – Cereal/Oilseed
    • Intercrop – Cereal/Pulse
    • Intercrop – Pulse/Oilseed
  • Annual crops grown outside of their restricted area (e.g. chickpeas, durum wheat, mustard, etc.) are insurable under New Crop Insurance Initiative. Clients who insure the same crop within the restricted area under Crop Insurance, and outside under New Crop Insurance Initiative, will be required to store, report, and sell their production separately.
  • Weather stations: Clients may choose one, two or three weather stations to best represent conditions on their farm, and within proximity of their land base. Since weather station information may be subject to change, visit www.afsc.ca or contact your AFSC branch for a current list of weather stations.
  • Wildlife Damage Compensation Program: There have been changes made to the Wildlife Damage Compensation Program. This information is available on the Wildlife Damage Compensation Program page.
  • AFSC online services: For 2020, AFSC will have new online features for Straight Hail through AFSC Connect.  Clients may estimate, purchase and report a hail claim using AFSC Connect. Visit www.afsc.ca to login or create your online account.

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  • Organic Certification: In the event that certification will be completed in the same crop year, clients are eligible for organic coverage at the start of the crop year by providing a Letter of Transmittal or suitable pre-certification documents to AFSC by April 30. To maintain organic coverage, clients would need to provide their organic certification in the fall.
  • Processing Vegetable Insurance: The processing plant will no longer receive a share of the coverage or indemnities through AFSC. As a result, clients will receive full coverage and premium on their subscription, which will be reflective on the Statement of Coverage and Premium. This will not impact the current bypass process or any other aspects of coverage AFSC provides for processing corn and peas.
  • Cocktail Crops: Cocktail crops are insurable under Silage Greenfeed Insurance when intended for livestock feed. Any mixture of a minimum of three crops meeting the following criteria:
    • Primary crop is single insurable crop under the Silage Greenfeed Insuring Agreement;
    • Primary crop is a single crop type comprising of 35 per cent or more of the plant population; and
    • No single crop or variety not included in the Insuring Agreement composes more than 20 per cent of the plant population
  • Preliminary Payments: In order to assist with cash flow in the fall, clients may be eligible for a portion of their potential indemnity based on their declaration. The Preliminary Payment option is based on the reported production from the Harvested Production Report, and offers an advance based on a 20 per cent increase (in production).
  • Weather stations: Clients may choose one, two or three weather stations to best represent conditions on their farm, and within proximity of their land base. Since weather station information may be subject to change, visit www.afsc.ca or contact your AFSC branch for a current list of weather stations.

Production Insurance

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AFSC offers insurance for both dryland and irrigated crops and provides a production guarantee based on a calculated individual coverage for each client. Indemnities are calculated and paid based on actual production and reflect conditions on the client’s farm.

Clients can insure their annual crops for production insurance coverage under two subscriptions: Crop Insurance for the majority of crops, and Processing Vegetable Insurance for eligible crops contracted to a processing plant.

AFSC sets a spring insurance price and determines the designated grade for each crop. Additional benefits and endorsements are offered to protect against price fluctuations between the spring insurance price and the calculated fall market price.

Clients elect the percentage of coverage and the options they want. When crop production, both harvested and appraised production, falls below the production guarantee and the loss is due to an insured peril, the corresponding amount for production shortfall will be paid at the final calculated price option, determined grade, and dollar value of the crop.

Crops which can be insured under Production Insurance include cereals, oilseeds, pulses, safflowers, sunflowers, organic crops, pedigree crops, commercial and pedigreed creeping red fescue, pedigreed alfalfa seed, pedigreed timothy seed, pedigreed hybrid canola, potatoes, fresh vegetables and processing vegetables. A full list of crops can be found under the individual Insuring Agreements in the Contract of Insurance.

These crops, including processing vegetable crops, and the Honey and Bee Overwintering Insurance programs are also listed in the Program Specifics by Crop table. This table includes information regarding available dryland and/or irrigation coverage, risk area restrictions and information regarding benefits and available endorsements.

  • Mixed grain is insurable where there is 79 per cent or less of any one crop in the mix. If there is 80 per cent or more of any one crop, the field is insurable as that crop, rather than as mixed grain.
  • Pure stands of pulse crops are insurable only when there is a maximum of 10 per cent of another crop in the mix. If the mix exceeds 10 per cent, contact your branch for insurance options.

Minimum acres: Most insurable crops do not have a minimum number of acres required to be insured, and all seeded acres of elected crops must be insured. Rather, there is a minimum $25 of actual calculated premium per insurance subscription. The minimum acreage requirements for insurable crops are listed in the Program Specifics by Crop table.

Eligibility Areas: Some crops are only insurable in specific risk areas across the province. The eligible risk areas for the following crops are based on the Crop Risk Area Maps which can be viewed on AFSC.ca

* Irrigation only

Risk area restrictions for additional crops, processing vegetables crops, specialty crops, honey and Bee Overwintering Insurance can be found in the Production Insurance Program Specifics by Crop table.  Additional risk area information can also be found in the Maps for Annual Crops resource on AFSC.ca

Seeding deadlines: The seeding deadline for most cereals and oilseeds is June 20, however, there are also recommended seeding dates.

The following crops have seeding deadlines and are not insurable when seeded after these dates. The seeding deadlines for all crops, including specialty crops, are listed in the Program Specific Tables.

If the following crops are seeded later than the recommended seeding dates, restrictions for grade-loss coverage may apply. The recommended seeding dates for all crops, are listed in the Program Specifics by Crop table.

Coverage is a fundamental part of any insurance policy and is based upon a long-term average yield. Clients can customize their insurance by choosing which crops to insure and elect a coverage level as a percentage of their individual coverage for each crop. Options and endorsements, such as the Auto-Elect Straight Hail option, Hail Endorsement and Spring Price Endorsement, may also be elected.

Coverage levels of 50, 60, 70 or 80 per cent can be elected for most insurable crops:

  • Sugar Beets coverage – is available up to 90 per cent.
  • Camelina and Canary Seed – coverage is limited to 50, 60 or 70 per cent coverage levels.
  • Processing Vegetable crops – coverage is limited to 70 or 80 per cent coverage levels.

Irrigation coverage: All acres of an elected crop must be insured, whether managed as irrigated or dryland, and each cropping practice is insured separately. Irrigated acres are insurable only when irrigated with an adequate source of water applied on a timely basis, and an Irrigation Log is maintained with dates and approximate amounts of rainfall and irrigation water applied to each field.

Hybrid canola is only insurable when managed as an irrigated crop. Other crops that are insurable only when managed as an irrigated crop are listed in the Program Specifics by Crop table.

Individual coverage information: A client’s average yield for a crop is based on the average of the yield records AFSC has recorded for that crop. Yield records are gathered in different ways, including:

  • From Harvested Production Reports (HPRs) provided by the clients;
  • Yield information gathered by AFSC inspectors who visit the farm in claim situations;
  • Random audits conducted by AFSC inspectors to confirm the accuracy of HPR information.

Rules for yield records used:
Individual coverage will use:

  • A blend of available yield records and the historical yields for the townships in which the client farms when there are four or fewer yield records available;
  • The average of up to 15 of the most recent yield records for a crop when there are five or more yield records available.

Yield records older than 25 years will not be used.

Start up: Coverage is based on a minimum of five years of records. Crops with fewer than five years of yields available in the system will be considered to be in the start-up phase. Missing yields will be filled in with the historical average yield for the townships in which the farm is located. If clients do not have any yield records available, coverage will be based entirely on the historical average for the township(s) where the farm is located.

Cushioning of low yields: One feature of individual coverage is cushioning of low yield records. Cushioning has the effect of stabilizing coverage by reducing year-to-year fluctuations. Unusually low yield records will be adjusted upward for the purposes of calculating the individual normal yield for a crop. When a crop yield is less than 70 per cent of the individual normal yield, the actual yield will be cushioned and replaced by 70 per cent of the individual normal yield for that crop for that year.

The actual yield is used to calculate an indemnity while the cushioned yield will be used to set future coverage.

Trending of yield records: 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 will be adjusted by a trend factor. Older yield records will be increased more than recent yield records.

Adjustments will be made by multiplying individual actual or cushioned yields by a trend factor. The trend factor is a number which reflects the average annual increase in yield for a specific crop in a specific risk area.

For example, if the trend factor for canola in Risk Area 7 is 1.012, then a yield at 30 bushels that is one year old will be increased by 1.012 (to 30.36 bushels) to reflect one year of improvements to technology and management.

If a yield at 30 bushels was four years old, it would be increased by 1.012 four times (31.47 bushels) to reflect four years of improvement.

Example: Client has insured canola since 2014 and has five yield records. Cushioned and trended yields will be calculated as:

 

Bushels are used for example purposes. Actual coverage is calculated in kilograms. For 2020 coverage will be based on the trended yield of 41.5 bushels per acre.

One-year lag: Actual yields are not available immediately for use as it takes time to gather and verify information. For example, a yield produced and reported in 2019 will not be available to calculate coverage for 2020; it will first be used to set coverage for 2021.

Fallow and stubble: Under individual coverage, each dryland crop has a fallow yield time series and a stubble yield time series. If a client only grows crops on stubble, a fallow yield will be created for every year that the client insured a crop on stubble. This way, if a client ever insures a crop on fallow, coverage will be provided that reflects his productive capacity. The same process will happen if there is only a fallow yield.

These fallow or stubble records will be created by applying the appropriate risk area fallow:stubble ratio to the existing yield record.

 

Additional insurance available: AFSC offers Auto-Elect Straight Hail as an option to purchase Straight Hail Insurance when coverage is elected for production insurance, on or before April 30, in advance of seeding crops.

Hail Endorsement offers spot-loss coverage for damage due to hail, accidental fire and fire caused by lightning. When this option is purchased and the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres. More information is available in the Endorsement section, under Hail Endorsement .

In the spring, AFSC forecasts expected crop prices for the coming crop year. In the fall, AFSC reviews the pricing using specific methodologies to determine whether the crop’s fall market price is substantially lower or higher than the spring insurance price and sets fall prices accordingly.

Variable Price Benefit: Crop Insurance includes the Variable Price Benefit and applies to most crops. Compensation is provided for each insured crop when there is a production shortfall below the insurance coverage guarantee, and the price of the insured crop increases by 10 percent or more from the spring insurance price to the fall market price. The benefit is limited to a 50 per cent change.

Spring Price Endorsement: Crop Insurance offers the Spring Price Endorsement which protects against within-year price declines of more than 10 per cent between the spring insurance price and the fall market price. The Spring Price Endorsement is limited to a 50 per cent change. Once triggered, it will pay back up to 90 per cent of the spring insurance price on production produced, or deemed to be produced, up to the coverage elected. Further information and examples can be found in the under Spring Price Endorsement .

All insurable crops that are eligible for the Variable Price Benefit and the Spring Price Endorsement are listed in the Program Specifics Table.

Premium rates are set annually based on historical losses and reflect AFSC’s risk of future production losses. Premium rates may vary by crop type, risk area, practice and coverage option.
Client premium is calculated by multiplying the dollar coverage by the client’s share of the premium rate and applying any applicable premium adjustments.

 

Only yield losses due to the following designated perils are covered under production insurance:

  • drought on dryland crops
  • excessive moisture
  • fire by lightning
  • flood
  • frost
  • hail
  • insect infestations
  • plant disease
  • Richardson’s ground squirrel (gopher)
  • snow
  • waterfowl and wildlife
  • wind

Uninsured causes of loss: Uninsured causes of loss may be applied to acres when clients fail to comply with the rules of the insuring agreement, including where recommended farm management practices are not followed.

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.

If clients fail to request an inspection prior to putting acres to a use other than harvesting, AFSC will apply uninsured causes of loss equal to coverage on the affected acres. The premium for the year must still be paid.

If clients refuse to allow AFSC to conduct an audit, a yield of zero is applied which, although cushioned, will negatively impact future coverage.

Losses on insured crops are based on production and quality. Where the crop is all harvested, the total production is adjusted for any quality losses and compared to the total coverage to determine the amount of loss. When some acres are not harvested, branch staff and inspectors will work with the client to determine an appraised production value for the acres, to add to the amount of total production.

Any losses are initially paid at the spring insurance price, and where the Variable Price Benefit (VPB) triggers, the fall market price is used to revise or calculate production loss claims.

Liability (dollar coverage) calculation:

If the yield guarantee for canola at the coverage level selected is 35 bushels per acre and the spring insurance price per bushel is $10, then liability or dollar coverage is:
35 bushels x $10 = $350 per acre

Assume: 22 bushels per acre of 1CAN canola harvested

Indemnity calculation (at designated grade):
Losses would be determined as:
35 bushels – 22 bushels = 13 bushels shortfall
13 bushels x $10 per bushel = $130 per acre indemnity

Indemnity calculation when VPB triggers (at designated grade):
Canola fall market price is $12 per bushel according to the Fall Market Price Methodology
The fall market price increased by 20 percent from $10 to $12; the shortfall is paid at the fall market price
13 bushels x $12 per bushel = $156 per acre indemnity

Indemnity calculation (below designated grade):
AFSC compares the value of the harvested grade to the value of the designated grade to create a grade factor. Then, to compensate for grade loss, the affected production is multiplied by the appropriate grade factor, which decreases net production and increases indemnity.

3CAN canola at a value $8.23 = 0.823 factor
Harvested 22 bushels per acre of 3CAN x 0.823 factor = 18 bushels
35 bushels – 18 bushels = 17 bushels shortfall
17 bushels x $10 per bushel = $170 per acre indemnity

Indemnity calculation when VPB triggers (below designated grade):

Canola fall market price is $12 per bushel according to the Fall Market Price Methodology
The fall market price increased by 20 percent from $10 to $12; the shortfall is paid at the fall market price
17 bushels x $12 per bushel = $204 per acre indemnity

This section highlights eligibility criteria and administration procedures and/or client responsibilities for:

  • Reseeding Benefit
  • Unseeded Acreage Benefit
  • Hail damage claims
  • Preharvest inspections
  • Harvested Production Reports
  • Post-harvest claims
  • Unharvested Acreage Benefit (snowed under)
  • Production inspections (audits)
  • Claim assessment disputes
  • Measuring acres with a global positioning system (GPS)

Reseeding Benefit: The Reseeding Benefit is included with production insurance on eligible crops insured at 60, 70, 80 or 90 per cent coverage levels. The Reseeding Benefit is not included at the 50 per cent coverage level. The cost of the Reseeding Benefit is included with production insurance premium, so separate premium for reseeded acres is not required.

The Reseeding Benefit provides compensation on a spot-loss basis for acres damaged on or before June 20 by designated perils, and is intended to partially compensate clients for the cost of reseeding the original crop.

The reseeding indemnity is paid according to the amount of the benefit payable on the crop originally insured.

The reseeded crop can be insured, provided it was elected on or before April 30 and seeded according to seeding guidelines and by the seeding deadline for the crop to which the acres were reseeded.

There is no limit to the number of reseeding claims that can be submitted on the same land. However, AFSC will only pay on land that has been released for reseeding.

Note: Payments under the Reseeding Benefit can impact premium adjustments under the basic production insurance policy.

Basic eligibility criteria: To qualify for this benefit, the reseeded acreage must be land that meets all of the following criteria:

  • The land to be reseeded was seeded to an insured crop and is damaged by an insured peril;
  • AFSC must release the acreage prior to the start of the reseeding.

Clients may not be required to reseed the acres to be eligible for the Reseeding Benefit, subject to inspection and confirmation that acres were put to another use.  Examples are when AFSC determines it is impractical to reseed the crop prior to the seeding deadline, or when the acres are deemed too wet to seed.

When AFSC determines it is impractical to reseed the crop prior to the seeding deadline, the client is eligible for the reseeding benefit, subject to inspection and confirmation that acres were put to another use.

Benefit values: The dollar-per-acre benefits are calculated based upon the original crop and are summarized for cereals and oilseeds in the table below. The Reseeded Benefit has a minimum acreage requirement of 10 acres or more for these cereals and oilseeds; except hybrid canola, which has a minimum requirement of five acres.

 

Reseeded Acreage Benefit values, and minimum acreage requirements for all insurable crops are listed in the Program Specifics by Crop table.

Unseeded Acreage Benefit: The Unseeded Acreage Benefit is included with production insurance. The cost of the Unseeded Acreage Benefit is included with production insurance premium, so separate premium is not required for unseeded acres.

The Unseeded Acreage Benefit provides compensation on a spot-loss basis for acres unseeded due to excess moisture as of June 20. This benefit is intended to partially compensate clients for the direct and indirect costs of seed bed preparation when seeding is prevented due to excess moisture.

Basic eligibility criteria: To qualify for this benefit, clients must have an active production insurance contract and acres must be unseeded as of June 20 due to excess moisture. The total number of acres intended to be seeded must have been declared by April 30.

Land that is rented or purchased after April 30 but before June 1 is eligible with written proof, copy of the signed rental agreement, or bill of sale; provided it is received at AFSC by June 1.

There is a five per cent deductible on all cultivated acres per quarter section.

To qualify for this benefit, the unseeded acreage must be land that meets at least one of the following criteria:

  • Intended to be seeded for crop, silage and/or greenfeed (insured and uninsured);
  • In hay or pasture the previous year and that was either worked or sprayed at a rate sufficient to kill that crop and intended to seed to a spring crop in the current year (insured and uninsured);
  • Seeded to a fall crop intended for harvest in the claim year;
  • Unharvested (snowed under) the previous year and is intended to be harvested in the spring prior to seeding a spring crop;
  • Qualified for a Reseeding Benefit and could not be reseeded on or before June 20 due to excessive moisture.

Note: AFSC may deny coverage on land where flooding or excess moisture is a recurring problem.

Levels of payment: There are four levels of payment and each level has different eligibility requirements:

  • Level 1: Dryland $49 per acre – compensates for direct costs (rent, land taxes and interest), land preparation (cultivation, harrowing, herbicide application and chemical fallow) and following year land maintenance;
  • Level 2: Dryland $108 per acre – compensates for Level 1 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required);
  • Level 3: Irrigated $107 per acre – compensates for direct costs (rent, land taxes and interest), land preparation, (cultivation, harrowing, herbicide application and chemical fallow), irrigation water rights and following year land maintenance;
  • Level 4: Irrigated $179 per acre – compensates for Level 3 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required).

Benefits are capped at the lesser of $108 per acre for dryland and $179 per acre for irrigated acres, or 50 per cent coverage for the client’s predominant dryland and irrigated crops.

Note: Payments under the Unseeded Acreage Benefit can impact premium adjustments under the basic production insurance policy.

For information on determining production in storage, refer to the Determining Production in Storage resource.

Hail and fire damage: Hail Endorsement and Straight Hail Insurance provide spot-loss coverage for damage due to hail, accidental fire and fire by lightning. When the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres.

Clients who purchase Hail Endorsement or Straight Hail Insurance, including Auto-Elect Straight Hail, must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office

Clients are to check insured fields to identify the damaged areas prior to filing a hail claim and are expected to take the inspector to damaged fields when the damage assessment is completed. When the initial assessment is less than 10 per cent and clients request a re-inspection, clients may be charged an hourly rate plus mileage.

Preharvest inspections: If clients choose to put an insured crop to a use other than combining, it is important that a preharvest inspection be requested through AFSC. An assessment on a low yielding crop may generate an insurance claim. On the other hand, a high yielding crop could increase coverage under production insurance for the future.

With AFSC approval, the client may have the option to leave standing inspection strips or swaths on acres being put to another use, to allow AFSC to conduct a preharvest appraisal.

Land that has been damaged by an uninsured peril will be assessed uninsured causes of loss and not paid under the insurance policy.

Crops put to an alternate use without being released by AFSC will have uninsured causes of loss assessed, which may affect post-harvest production insurance and Spring Price Endorsement indemnities.

Claim or assessment information: The branch must be notified five days in advance of putting a crop to a use other than harvesting. AFSC will need to know:

  • The number of acres intended to be put to an alternate use;
  • The reason for the alternate use;
  • An estimate of the yield.

Depending on the estimate of yield, an inspector may complete a field inspection to determine the yield appraisal before acres are released.

On or before June 20 (Stage 1): Damaged acres may be eligible for one of the following:

  • Reseeding Benefit, or
  • A yield appraisal of not less than 50 per cent of coverage.

After June 20 (Stage 2): The crop can be carried to harvest and an insurance claim filed if total harvested production is less than guaranteed coverage. Crop (either partial acres or total acres) can be put to another use and, based on the client’s estimated yield; the acres may either be released from the client’s branch or inspected by an AFSC inspector to determine the yield appraisal.

Carryover inventory: Carryover grain, including purchased inventory and uninsured crop production, stored on or off the farm must be declared to AFSC when filing the current year Land Report even though the intent may be to sell or feed it before harvest.

The amount of carryover inventory must be reported prior to the commencement of harvest and not later than August 15 on a Report of Grain in Storage Prior to Harvest form. Clients may be required to provide sales receipts to identify carryover, purchased inventory and uninsured production sold after August 1. It is important to report carryover grain as it may affect eligibility for an advance or claim if in a loss situation.

Clients can account for any carryover inventory acquired, fed or sold after filing the Report of Grain in Storage Prior to Harvest form on their Harvested Production Report.

Harvested Production Reports: When production insurance for annual crops is purchased, an HPR will be created based on the Statement of Coverage and Premium.

The HPR must be submitted on-line or to a branch office when harvest is complete, and no later than November 15 (September 15 for pedigreed timothy seed and commercial and pedigreed creeping red fescue). A late filing fee will be applied for HPRs submitted after the deadline. Failure to file an HPR by December 31 will result in a yield recorded as zero and no indemnity will be calculated.

Notification of an insurance claim and any required loss adjustment procedures are based on the information provided by clients on the HPR. Any changes in carryover inventory from what was reported earlier in August must be reported. Identify yield differences by field in the upper portion as the HPR is the main source of historical data for fallow/stubble and variety yield differences and will affect future coverage.

When the estimated yield appraisal of a crop is extremely low, a graduated yield appraisal is applied to the impacted acres. This allowance for low yield is included with yield loss coverage for cereal, oilseed and pulse crops and will be applied to the harvested or appraised production on a field-by-field basis. Graduated categories are determined by crop type, and the yield will be reduced to adjust for the additional cost of harvesting, increasing potential indemnities from the program.

Post-harvest claims: Post-harvest claims are triggered from information provided on the HPR.

An inspector is assigned to the claim and will make an appointment for a field inspection. The inspector will:

  • Verify and/or measure the number of acres insured;
  • Identify acres harvested; and
  • Determine the quantity and quality of the crop harvested by sampling storage facilities and reviewing production sales receipts.

Samples taken by AFSC and sold production to a primary or terminal elevator and graded according to Canadian Grain Commission standards are eligible for grade adjustment. When grain is sold that is not graded according to Canadian Grain Commission standards, AFSC’s designated grade will apply.

Unharvested crops: The Unharvested Acreage Benefit provides an advance payment for eligible acres on insured crops that remain unharvested after November 30 because of the onset of winter, when the client suffers a production loss. Acres will be considered eligible for the Unharvested Acreage Benefit when acres exceed 20 per cent of the insured acres for each eligible crop and production is less than coverage for that crop.

Production inspections: To ensure program integrity, AFSC completes a number of audits. Some audits are selected on the basis of an identified risk, while others are randomly generated. The procedures used for production audits are generally similar to post-harvest claims.

Claim assessment disputes: AFSC recommends that the client accompany inspectors during field inspections to understand the assessment process. The inspector will explain the procedures being used, request a client signature on the loss assessment documents, and will leave copies.

If there is a disagreement with the initial loss adjustment, a second inspection by a Senior Inspector may be requested.

Once the second inspection is completed and there is still disagreement, an appeal may be filed by following the procedure outlined in the AFSC Contract of Insurance for Annual Crops.

Measuring acres with a global positioning system (GPS): GPS provides AFSC with a quick and accurate tool for measuring fields. Because production insurance uses seeded acres for the calculations that determine coverage, premium and losses, it is important that AFSC have the most accurate field information available.

Acreage tolerance: AFSC’s acreage tolerance policy applies to fields measured by AFSC. Tolerance is the lesser of five per cent or 20 acres by crop type. For additional information, reference the Annual Crops Contract of Insurance section on Insured Acres

Renewals: Clients who purchased production insurance, both Crop Insurance and Processing Vegetable Insurance, in the previous year will be automatically renewed based upon the previous year’s information.

Personalized renewal notices are available in March. Clients are responsible to review the information, complete a Change Request form online if changes are required or return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by April 30.

Hail Endorsement and Spring Price Endorsement may be purchased with production insurance coverage at 60, 70, 80, or 90 per cent coverage levels by April 30. Auto-Elect Straight Hail Insurance may be purchased by April 30. Straight Hail Insurance can be purchased throughout the growing season.

New clients: New clients must apply for production insurance on or before April 30 and AFSC will evaluate eligibility for insurance. New clients are required to demonstrate their legal, financial and operational independence. Required information includes Social Insurance Number or Business Number, legal land descriptions and number of acres on each location.

For each insured crop, clients will need to select a coverage level, end use, and can elect Hail Endorsement, Spring Price Endorsement, and Auto- Elect Straight Hail option.

Elections (Renewal Notice): Clients should ensure their Confirmation of Insurance has the correct crops, coverage levels, endorsements and declared acres.

Clients will be able to specify which crops to insure with the flexibility to adjust coverage levels and endorsements. They will need to review and elect all the crops they intend to insure on or before April 30.

Declared Acres: The total number of acres seeded and those intended to be seeded to insured and uninsured annual spring and fall crops must be reported. Declared acres must be correct as the Unseeded Acreage Benefit is limited by the acres declared, and will not be adjusted after the April 30 deadline, unless AFSC receives written proof by June 1 that additional land was purchased or rented between May 1 and May 31.

Details for specific crops

Pedigreed coverage is available for Canadian Seed Growers Association (CSGA) members who would like to purchase a higher price option for pedigreed insurance coverage. Pedigreed coverage provides a germination guarantee, and when harvested production fails germination standards for the crop, clients may be eligible for a claim.

Hemp grain: Irrigated Coverage is restricted to Risk Areas 2, 3, 4 and 5. For both dryland and irrigated hemp, proof of contract is required for eligibility. In the event of a production shortfall, proof of license for commercial production from Health Canada must be presented.

Irrigated pedigreed hybrid canola: Coverage is provided for approved and contracted varieties of canola within restricted risk areas. The insured must provide a copy of the contract to AFSC in the name of the business insuring the crop. If two or more businesses are insured together, the name of the contract could be one of the businesses, provided the named parties do not have any other insurance.

Malt barley: To elect malting end use for barley, the insured must provide AFSC a contract in the name of the business insuring the crop, from a licensed buyer and have a minimum of 40 tonnes contracted. If two or more businesses are insured together, the name of the contract could be one of the businesses, provided the named parties do not have any other insurance.

Clients cannot insure both malt barley and commercial barley for the same crop year. If both malt and feed varieties (as defined by AFSC) are grown on the same farm, coverage will be restricted to commercial on all barley acres grown.

Organic crops: Coverage is available to clients that are certified organic growers through the Canadian Food Inspection Agency for the current crop year. In the event that certification will be completed in the same crop year, clients are eligible for organic coverage at the start of the crop year by providing a Letter of Transmittal or suitable pre-certification documents to AFSC by April 30. To maintain organic coverage, clients would need to provide their organic certification in the fall. Clients who lose organic certification must notify AFSC within five days.

Clients cannot insure both organic and commercial crop for the same crop year. Example: Clients can insure either organic barley or commercial barley, but not both in the same year.

Specialty oil canola varieties: Coverage is available for eligible canola varieties contracted to plants for their oil profile. The insured must provide a copy of the contract to AFSC in the name of the business insuring the crop. If two or more businesses are insured together, the name on the contract could be one of the businesses, provided the named parties do not have any other insurance.

Land Report: A Land Report must be completed and submitted on-line or to a branch office once seeding is finished and no later than June 20 for most crops. Fall seeded crops and perennial seed crops land report must be filed by April 30.

AFSC requires both insured and uninsured land information. Coverage is based on the land base farmed, not just the land insured, therefore the information is required to ensure coverage and discounts are correct.

Acres intended for summerfallow, all insured and uninsured (perennial and annual, spring and fall) crops grown for commercial, pedigreed or other end uses on land that is owned, rented, and crop-shared must be reported. Clients will not receive the All Crops discount when all information is not provided.

Statement of Coverage and Premium: Land information is keyed to generate a Statement of Coverage and Premium, which explains coverage and premium and states AFSC’s liability limit. Clients should review their billing carefully to ensure it is complete and accurate. Errors and omissions must be reported to AFSC within 15 calendar days of receipt. Accuracy is important, and AFSC reserves the right to deny additional liability when information contained on the Statement of Coverage and Premium reflects what is reported on the Land Report.

The client will also be provided with the following items:

  • Client Reported Hail Claim Information (for Hail Endorsement and Auto-Elect Straight Hail clients);
  • Report of Grain in Storage Prior to Harvest;
  • Irrigation Logs (if applicable);
  • Potato documents (if applicable).

 

Reseeding Benefit: Clients are required to notify AFSC of intent to reseed an insured crop. Clients need to contact their branch prior to reseeding and on or before June 20, and provide the following information:

  • Legal land locations;
  • Insured crop that is damaged;
  • Crop intended to be reseeded;
  • Number of acres to be reseeded; and
  • The cause of loss.

Either an inspector will inspect the acres to be reseeded or approval will be given by the branch staff to reseed. Acres that are not released by AFSC prior to reseeding are not eligible for this benefit.

Once reseeding is complete, the branch must be contacted. An inspector will confirm the actual number of released acres prior to payment.

Unseeded Acreage Benefit: Clients should contact a branch to file their Land Report and report any unseeded acres no later than June 20 and provide the following information:

  • All legal land locations (reported separately by quarter section) that have unseeded acres;
  • For each quarter section: Total number of cultivated acres;
    • Number of dryland unseeded acres, and irrigated unseeded acres;
    • Number of acres seeded;
    • Number of acres intended for summerfallow;
    • Number of acres in hay and pasture;
    • Number of acres released for reseeding that could not be reseeded due to excessive moisture; and
    • Whether or not fertilizer was applied, on a field-by-field basis.

AFSC will verify the total number of acres that qualify for an unseeded acreage claim and determine the level of payment by confirming field preparation expenditure.

Hail and fire damage: For damage of 10 per cent or more under either Hail Endorsement or Straight Hail Insurance, clients must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

AFSC requires the following information when a report of hail damage is filed:

  • The legal location, crop type and number of acres effected;
  • The date of the storm; and
  • Estimate of percentage of damage for each crop.

Clients should inspect fields, identify hail-damaged areas, and be able to accompany the inspector to damaged acres. Inspectors may wait to adjust a claim so that damage is more accurately identified. Claims may be deferred if crops are not sufficiently mature for accurate damage to be assessed.

If the crop is damaged when mature enough to swath or harvest, once authorized by AFSC, clients may leave representative inspection strips or swaths for inspectors to use to assess damage. Additional information is available in the Inpsection Strips resource.

Preharvest – Reporting alternate crop uses: Clients are 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.

Clients must not dispose of an insured crop or put it to a use other than combining without AFSC releasing acres, as it may negatively impact their insurance. Once authorized by AFSC, clients may leave inspection strips if putting acres to another use. Additional information is available in the Inpsection Strips resource.

Carryover inventory: Carryover grain, including purchased inventory and uninsured crop production, stored on or off the farm must be declared to AFSC when filing the current year Land Report even though the intent may be to sell or feed it before harvest.

The amount of carryover inventory must be reported prior to the commencement of harvest and not later than August 15 on a Report of Grain in Storage Prior to Harvest form. Clients may be required to provide sales receipts to identify carryover, purchased inventory and uninsured production sold after August 1. It is important to report carryover grain as it may affect eligibility for an advance or claim if in a loss situation. For information on determining production in storage, refer to the Determining Production in Storage resource.

Clients can account for any carryover inventory acquired, fed or sold after filing the Report of Grain in Storage Prior to Harvest form on their Harvested Production Report.

Harvested Production Reports: These reports must be filed when harvest is complete and submitted online or to a branch no later than November 15. (September 15 for pedigreed timothy seed and commercial and pedigreed creeping red fescue).

The information reported is used to:

  • Determine whether there is a post-harvest insurance claim;
  • Identify fallow/stubble yield differences;
  • Determine yield information when there is no claim;
  • Identify yield information by field/legal location, crop, and cropping practice to establish normal production estimates;
  • Help with future program research; and
  • Select situations for audits to ensure that information provided by clients is accurate.

Note: A late-filed HPR must be submitted by the deadline of December 31 and is subject to a late-filing fee. Failure to file an HPR may result in forfeiture of an indemnity and the application of a zero-yield estimate resulting in lower coverage for the future.

For information on determining production in storage, refer to the Determining Production in Storage resource.

Water Allocation Restriction Benefit for Irrigated Crops: In the event that water restrictions are applied by an irrigation district, Government of Alberta or other third party supplier, coverage will remain as irrigated providing a minimum of 50 per cent of the restricted water allocation is applied to insured fields.

  • When filing their Land Report, clients need to report acres that are not intended to receive at least 50 per cent of their water allocation as dryland.
  • Clients must report to AFSC on their Harvested Production Report which acres had the water reduction.
  • If less than 50 per cent of the water allocation is applied on a per acre basis to any insured acres over the growing season, those acres will be reverted to dryland coverage.

Post-harvest advance: Clients can request a 50 per cent advance for crops reported on their HPR, when there is a potential indemnity payment. Advance indemnities must exceed $500, can be deferred and will be applied to amounts owing to AFSC and assignments. Once the post-harvest claim is finalized, any advance overpayments must be repaid within 30 days of notification.

Preliminary payment: Clients can request a preliminary payment any time before their post harvest inspection is completed. A Preliminary Payment takes the client’s new production without grade loss and adds 20 per cent to it to mitigate the risk of overpayments. AFSC calculates the difference between that estimated production and their coverage, then pays the indemnity based on that estimated production loss. Once the post-harvest claim is finalized, AFSC recalculates the loss without the 20 per cent increase in production and pays the remaining amount owed including any grade loss.

Unharvested advance: Clients need to contact their branch on or before the deadline of November 15 to file HPRs and to identify acres that remain unharvested (snowed under) due to weather. When there are greater than 20 percent of acres by crop, and the harvested production is less than coverage, the client may be eligible for an Unharvested Acreage Benefit.

Other responsibilities: For irrigated crop acres, clients are required to maintain an Irrigation Log showing the dates of precipitation and approximate amount of water applied.

Unlicensed and deregistered varieties must be stored separately and do not qualify for grade loss adjustments.

Potato documents must be completed as requested, if applicable.

Clients should maintain a record of grain sales as they occur. AFSC inspectors will determine the quality and quantity of the crop by sampling storage facilities and reviewing production sales receipts.

Honey Insurance

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This program provides coverage for hives managed for the sole purpose of honey production. Indemnities are calculated when there is a loss of production resulting from naturally occurring perils.

Honey Insurance is divided into four risk areas across the province and coverage and premium is based on these risk areas. Clients can elect coverage levels of 50, 60, 70 or 80 per cent.

All honey producing hives must be insured and there is a minimum eligibility requirement of 100 hives. Hives that are overwintered outside of Alberta must be back in the province by May 31 and reported on the Hive Yard Location form supplied by AFSC.

Individual coverage information: A client’s average yield for honey is based on the average of the yield records AFSC has recorded for that crop. Yield records are gathered in different ways, including:

  • From Harvested Production Reports (HPRs) provided by the clients;
  • Yield information gathered by AFSC inspectors who visit the farm in claim situations;

Individual coverage will use:

  • A blend of available yield records and the historical yields for the risk area in which the client farms when there are four or fewer yield records available;
  • The average of up to 15 of the most recent yield records when there are five or more yield records available

Hives may be subject to an acceptance inspection in the spring by AFSC to determine if hives are strong and viable.

Renewals: Clients who purchased Honey Insurance in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in March. Clients are responsible to review the information, complete the Change Request form if changes are required, and return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by April 30.

New clients :New clients must apply for Honey Insurance on or before April 30 and AFSC will evaluate eligibility for insurance. Clients will need to elect a coverage level of 50, 60, 70 or 80 per cent and report the number of hives they wish to insure.

Special considerations for Honey Insurance: To be eligible, clients must:

  • Be registered and operate under the regulations of the Bee Act in Alberta;
  • Ensure hives that are transported away from the primary location are returned on or before May 31 and reported on the Hive Yard Location form supplied by AFSC;
  • Insure all honey producing hives and must have a 100 hive minimum to insure; and
  • Follow the industry best management practices.

AFSC reserves the right to inspect hive locations for overcrowding and placement.

Deadlines : Clients must apply, elect options or cancel by April 30.

All Honey Insurance clients are required to complete and file the Report of Producing Hives, and the Hive Yard Location form on or before May 31. AFSC requires that a copy of the Application and Certificate of Registration from the Provincial Apiculturist be attached to the Report of Producing Hives as proof of registration under the Bee Act in Alberta.

Hives overwintered outside the province of Alberta must be back in the province by May 31.

Clients are required to report all of their hives to the Provincial Apiculturist and AFSC on or before June 30.

Clients are required to file their Harvested Production Report (HPR) on or before October 30.

Bee Overwintering Insurance

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This program provides coverage for the loss of bees, in excess of normal losses, resulting from naturally occurring perils beyond management control. Clients must be registered, operate under, and meet the requirements of the Bee Act in Alberta. Clients do not need to participate in Honey Insurance to qualify for this program.

Coverage begins November 1 and ends May 15. All hives overwintered in Alberta by the client must be insured and clients must have a minimum of 100 insurable hives.

Bee Overwintering Insurance has two options for dollar coverage per hive, a high price and a low price, and applies a 90 per cent coverage level to the client’s individual coverage survival rate. The province is divided into four risk areas and coverage and premium is based on these risk areas.

Newly insured client’s coverage is calculated using the Risk Area Survival Rate using the coverage calculations below:

  • Number of Insurable Hives x Survival Rate x 90 per cent coverage level x dollar coverage per hive
  • Risk Areas 1, 2, 3 = number of insured hives x 80 per cent x 90 per cent coverage level x high or low dollar coverage
  • Risk Area 4 = number of insured hives x 70 per cent x 90 per cent coverage level x high or low dollar coverage

Schedule of coverage

Coverage example

A beekeeper with individual survival rate of 83 per cent insures 1000 hives for Bee Overwintering Insurance at the high dollar value.

Number of Insurable hives x Individual Survival Rate x 90 per cent coverage level x dollar coverage
1000 hives x 83% x 90% x $175
747 x $175 = $130,725 coverage

Limits and penalties apply when a fall inspection determines there are 20 per cent more or 20 per cent fewer insurable hives than declared on the election of hives.

Insurable hives are determined by AFSC’s On Farm Inspections during the fall inspection based on the following criteria:

  • Adequate feed;
  • Medication;
  • The extent of mite infestation; and
  • The number of good frames, and brood condition.

The methodology used to determine a good frame is established by AFSC and implemented by On Farm Inspections.

Coverage will be excluded for:

  • Hives overwintered outside of the province;
  • Hives that AFSC inspects and deems too weak to survive the winter;
  • Leafcutter bees and nucs; and
  • Single brood hives stored outdoors.

Only losses due to the following designated perils are covered under Bee Overwintering Insurance:

  • Weather conditions including, but not limited to: snow, excessive cold, excessive moisture, frost, flood, temperature fluctuations
  • Diseases or pests deemed to have no effective or adequate means of control
  • Any other peril designed by AFSC from time to time where the peril results in high death loss to overwintered bees

When the fall inspection determines that all hives are insurable and they do not exceed 120 per cent of the reported hives, the client will be eligible for a claim if the number of dead hives exceeds their deductible. The table below demonstrates loss calculations for a dead hive and a weak hive.

Indemnity example

For the same beekeeper as above, On Farm Inspector determines during the spring inspection that there are 300 strong hives, 260 weak hives, and 440 dead hives. The calculation for hives lost combines the dead hives with the weak hives (adjusted by a 2/3 factor) rounded to the nearest full number.

Example of hives lost calculation:
440 dead + (260 weak x 2/3)
440 + 173 = 613 insured hives lost

The calculation for the surviving hives adds the strong hives to weak hives (adjusted by a 1/3 factor) rounded to the nearest full number.

Example of surviving hives calculation:
300 + (260 x 1/3 factor)
300 + 87 = 387

The indemnity award calculation is as follows:
[(Insurable Hives x Individual Survival Rate x 90 per cent coverage level) – surviving hives] x dollar coverage
(1000 x 0.83 x 0.90) – 387 = 360 (if negative, no indemnity is paid)
360 x $175 = $63,000

Renewals: Clients who purchased Bee Overwintering Insurance in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in May. Clients are responsible to review the information, complete the Change Request form if changes are required, and return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by June 20.

Cancellations : Bee Overwintering Insurance is continuous and remains in effect from year to year unless cancelled in writing or on a Change Request form by the client on or before June 20.

New clients : New clients must apply for Bee Overwintering Insurance on or before June 20 and AFSC will evaluate eligibility for insurance. Clients will need to elect one of two price options and, based on the risk area, a survival rate will be applied. At this time, clients also report the number of hives they intend to overwinter in Alberta.

Special considerations for Bee Overwintering Insurance : To be eligible, clients must:

  • Be registered and operate under the regulations of the Bee Act in Alberta;
  • Insure all hives overwintered in Alberta;
  • Have a minimum of 100 insurable hives;
  • Provide a Treatment Log to the On Farm Inspector during the unwrapping inspection; and
  • Follow the industry best management practices.

Note: Single-brood hives must be stored indoors to be eligible for Bee Overwintering Insurance.

Deadlines: Clients must apply, elect options, or cancel by June 20.

All Bee Overwintering Insurance clients are required to complete and file the Report of Bee Overwintering Hives & Yard Location form on or before September 1.

Inspections : All hives are subject to inspections by AFSC. Hives must be strong and viable.

In the fall, clients are required to notify AFSC 14 days prior to wrapping hives. An inspection is required prior to wrapping and/or moving to indoor storage. Coverage will not apply to hives wrapped after November 1.

In the spring, clients are required to notify AFSC within 10 days prior to unwrapping hives as an inspection is required prior to unwrapping or moving from indoor storage. Coverage will be denied when AFSC is notified that hives are being unwrapped after May 15.

Movement of hives: AFSC must be advised of all hive movements after the fall acceptance inspection has been completed and prior to the spring inspection.

Movement of hives outside of the province of Alberta prior to December 15 will result in coverage being denied and a premium refund for hives that were moved.

Movement of hives on or after December 15 will result in those hives being assessed as uninsured cause of loss, and the client will be responsible for the premium.

New Crop Insurance Initiative

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New Crop Insurance Initiative is an area-based program which provides protection to new and non-traditional crops that are not insurable under other AFSC insurance programs. Field inspections are not required for preharvest or post-harvest inspections. Field inspections are required for hail claims to assess damage for Hail Endorsement and Straight Hail Insurance, and a field inspection may be required for acres left unseeded. Clients need to contact AFSC in any of these circumstances.

AFSC reserves the right to deny insurance coverage to crops that are not considered to have a reasonable chance of harvest or where the cost of production cannot be determined for the crop.

Client eligibility: To qualify for NCII coverage, clients must have insured acres of the same land use for both NCII and Crop Insurance. For example, to qualify for irrigated coverage of an NCII crop, the client must have irrigated acres insured on their Crop Insurance subscription.

Fields insured under NCII will need to be within close proximity to the fields insured under Crop Insurance.

Insurable crops: The insurable crops under NCII include crops that AFSC does not currently offer production ‘type’ insurance coverage.

Current insurable crops under Crop Insurance that are grown under an organic production system are not insurable under this innovative crop coverage option.

Intercropping crops are now insurable under NCII. For the purposes of NCII Intercropping is defined as two annual seeded crops planted together with the intent to harvest both crops in the fall. There will be three intercropping categories based on the mixture of the crop types grown.  The categories will be:

  • Intercrop – Cereal/Oilseed
  • Intercrop – Cereal/Pulse
  • Intercrop – Pulse/Oilseed

Annual crops that have risk area restrictions (e.g. chickpeas, durum wheat, mustards, safflower, soft white spring wheat) under the crop insurance contract can now have their acres of the specific crop being grown outside of the restricted area can now be insured under the New Crop Insurance Initiative (NCII). In situations where a client insured acres both within and outside of the restricted risk area will have to follow all the standard rules regarding keeping production separate etc.

Insurable perennial seed crops will not be insurable in the year of establishment.

There may be limited information available for some of the crops that clients will want to insure. This may result in AFSC requiring considerable time to determine an estimate for coverage and premium. To maximize the possibility of providing insurance, clients are urged to request an estimate on a crop as soon as the decision to grow a crop has been made. This will allow AFSC adequate time to calculate coverage and premium. The insurance application deadline is April 30. The request for an estimate does not commit a client to take insurance, it simply provides AFSC with the necessary time to determine coverage and premium.

Minimum acres: There is no minimum acreage requirement for a crop to be insured under NCII. Rather, there is a minimum $25 of actual calculated premium per insurance subscription.

Eligibility areas: The eligible areas will be determined on a crop-by-crop basis. AFSC reserves the right to not offer insurance coverage on crops that are not considered to have a reasonable chance of harvest. The viability criteria will be based on agronomic criteria such as days to maturity, etc.

Seeding deadlines: The seeding deadline for most crops insurable under NCII is June 20. However, if best management practices recommend an earlier date, a recommended seeding date may apply. Clients should contact their branch for the recommended seeding dates for crops that they wish to insure.

Each crop type will have a coverage level calculated for it on a provincial level based on the specific costs for that crop. Dryland and irrigated acres will have different costs covered. This means that for the same crop type grown on dryland and under irrigation, there will be two coverage levels. For example, dryland dill will have different coverage than irrigated dill.

Initially, the coverage will be based on selected direct cost of production (CoP) associated with seedbed preparation, seeding, spraying, harvesting and a land opportunity cost factor. The specific costs are:

  • Fertilizer, pesticide, herbicide;
  • Seed and seed treatment;
  • Fuel and oil;
  • Utility and water cost associated with irrigation; and
  • Land utilization cost.

Irrigation coverage: All acres of an elected crop must be insured, whether managed as irrigated or dryland, and each land use (dryland, irrigation) must be insured and stored separately.

Irrigated acres are insurable only when irrigated with an adequate source of water applied on a timely basis, and an Irrigation Log is maintained with dates and approximate amounts of rainfall and irrigation water applied to each field.

Individual coverage information: A client’s coverage will be updated based on the average of the yield records AFSC has recorded for that crop. Yield records for the New Crop Insurance Initiative will be gathered from the Harvested Production Reports (HPR) provided by the client.

Rules for yield records used: Individual coverage will use the available yield records when the client has grown and insured the crop:

  • The average of up to five of the most recent yield records for a crop multiplied by the current market price of the commodity;
  • Yields up to 10 years old can be used in the coverage calculation.

Start up: All crops insurable under the New Crop Insurance Initiative will start in a two-year start-up phase where coverage is based solely on the cost of production. As the client grows and insures the crop, the cost of production values will be replaced with actual yield produced multiplied by the current year’s market price for the commodity.

Cushioning and trending: Low yields will not be cushioned and yields will not be trended.

One-year lag: Actual yields are not available immediately for use as it takes time to gather and verify information. For example, a yield produced and reported in 2019 will not be available to calculate coverage for 2020; it will be used first to set coverage for 2021.

Updating coverage: The coverage that is based on the client’s actual yields will be limited to 70 per cent of average yield. 

Fallow and stubble: The insurance coverage will make no distinction between crops grown on fallow and stubble. However, the client will be required to report the fallow and stubble yields separately to ease the potential transition of the crop to the traditional production insurance program. 

Hail Endorsement: Hail Endorsement offers spot-loss coverage for damage due to hail, accidental fire and fire caused by lightning. When this option is elected and the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres. More information can be found under the Hail Endorsement section.

It is expected the Hail Endorsement will be offered on the majority of crops that are insurable under the New Crop Insurance Initiative. However, AFSC reserves the right not to provide Hail Endorsement coverage on crops where hail damage cannot be accurately assessed.

The final determination of the insurable crops will be based on On Farm Inspections’ ability to assess hail damage on each specific crop. The same policies and procedures that apply to production insurance will apply here.

In the spring, AFSC will determine the cost of production value that will be offered for the start-up period.

Variable Price Benefit: The Variable Price Benefit will not be offered to crops insured under New Crop Insurance Initiative.

Spring Price Endorsement: The Spring Price Endorsement will not be offered to crops insured under New Crop Insurance Initiative.

Premium rates for the New Crop Insurance Initiative will be based on a methodology that is determined by AFSC’s Actuarial, Analytics and Forecasting Department to reflect the risk of future losses. Premium rates may vary by risk area and land use.

Client premium is calculated by multiplying the dollar coverage by the client’s share of the premium rate and applying any applicable premium adjustment. There will be two discounts that will apply to New Crop Insurance Initiative:

There are no specific designated perils for the crops insured under the New Crop Insurance Initiative. It is a proxy insurance and losses are based on crops insured under the client’s Crop Insurance.

Uninsured causes of loss: As New Crop Insurance Initiative is a proxy insurance and losses are based on crops insured under the client’s Crop Insurance, there will be no circumstances that would require the application of uninsured causes to an New Crop Insurance Initiative crop.

The losses on insured crops consider whether the crop is grown under dryland or irrigation, and are based on the total dollar loss divided by total dollar coverage, for dryland and irrigated separately, that a client experiences for the current year on the crops already insured under their Crop Insurance.

Liability (dollar coverage) calculation: If the dollar coverage for a specific New Crop Insurance Initiative crop is $300 per acre and the number of acres insured is 200, then the liability is:

  • $300 per acre x 200 acres = $60,000

Indemnity calculation: The Crop Insurance losses and dollar coverage used in the calculation will be based on the coverage level selected for each crop. The losses and the coverage will include the impacts of both the Variable Price Benefit and quality loss under Crop Insurance. The losses and coverages will not be restated to a common coverage level.

In this example, if a client had $60,000 of total coverage under New Crop Insurance Initiative, and insured three crops of the same land use (e.g. dryland) under Crop Insurance, the indemnity will be determined as follows:

The client would receive an indemnity of: $60,000 x 80% = $48,000

This section highlights eligibility criteria and administration procedures and/or client responsibilities for:

  • Unseeded Acreage Benefit;
  • Hail damage claims;
  • Wildlife Damage Compensation Program; and
  • Routine inspections.

A Reseeding Benefit will not be offered to crops insured under the New Crop Insurance Initiative.

Unseeded Acreage Benefit: The Unseeded Acreage Benefit is included with New Crop Insurance Initiative and the cost will be included in the premium so a separate premium is not required for unseeded acres.

The Unseeded Acreage Benefit provides compensation on a spot-loss basis for acres unseeded due to excess moisture as of June 20. This benefit is intended to partially compensate clients for the direct and indirect costs of seedbed preparation when seeding is prevented due to excess moisture.

Basic eligibility criteria: To qualify for this benefit, clients must have both active Crop Insurance and New Crop Insurance Initiative contract and acres must be unseeded as of June 20 due to excess moisture. The total number of acres intended to be seeded to New Crop Insurance Initiative crops must have been declared by April 30.

Unseeded Acreage Benefit is limited by the acres reported. Declared Acres will not be adjusted after the April 30 deadline, unless AFSC receives written proof by June 1 that additional land was purchased or rented between May 1 and May 31.

There is a five per cent deductible on all cultivated acres per quarter section. To qualify for the benefit, the unseeded acreage must be land that meets a least one of the following criteria:

  • Intended to be seeded to New Crop Insurance Initiative crops;
  • In hay or pasture the previous year and that was either worked or sprayed at a rate sufficient to kill that crop and intended to seed to an New Crop Insurance Initiative crop in the current year;
  • Seeded to a fall crop intended for harvest in the claim year;
  • Unharvested (snowed under) the previous year and is intended to be harvested in the spring prior to seeding a spring crop.

Note: AFSC may deny coverage on land where flooding or excessive moisture is a recurring problem.

There are four levels of payment and each level has different eligibility requirements:

  • Level 1: Dryland $49 per acre – compensates for direct costs (rent, land taxes and interest), land preparation (cultivation, harrowing, herbicide application and chemical fallow) and following year maintenance;
  • Level 2: Dryland $108 per acre – compensates for Level 1 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required);
  • Level 3: Irrigated $107 per acre – compensates for direct costs (rent, land taxes and interest), irrigation water rights and following year land maintenance;
  • Level 4: Irrigation $179 per acre – compensates for Level 3 plus pre-plant incorporation of fertilizers (confirmation receipts may be required).

Benefits are capped at the lesser of $108 per acre for dryland and $179 per acre for irrigated acres, or the equivalent to 50 per cent coverage for the client’s predominant dryland and irrigated crops on their Crop Insurance.

Note: Payments under the Unseeded Acreage Benefit for New Crop Insurance Initiative will not impact the premium adjustment under the Crop Insurance policy.

Hail and fire damage: The Hail Endorsement and Straight Hail Insurance provide spot-loss coverage for damage due to hail, accidental fire and fire by lightning. When the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres.

Clients who purchase the Hail Endorsement or Straight Hail Insurance, including Auto-Elect Straight Hail, must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

Clients are to check insured fields to identify the damaged areas prior to filing a hail claim and are expected to take the inspector to damaged fields when the damage assessment is completed. When the initial assessment is less than 10% and clients request a re-inspection, clients may be charged an hourly rate plus mileage.

Wildlife Damage Compensation Program: AFSC regulations require that wildlife compensation applies to all commercially grown cereal, oilseed, special and other crops that can be insured under the production and Straight Hail Insurance programs. View the Wildlife Damage Compensation Program page to learn more about the program.

Routine inspections: AFSC will require access to fields insured under the New Crop Insurance Initiative to gather agronomic information for future use.

Renewals: Clients who purchased New Crop Insurance Initiative in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in March. It is the client’s responsibility to review the information, complete the Change Request form if changes are required and return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by April 30.

Clients must report the number of acres intended to be insured under New Crop Insurance Initiative by April 30. Provided the crop is eligible, the Hail Endorsement may be elected with the New Crop Insurance Initiative by April 30, and Straight Hail Insurance can be purchased throughout the growing season.

New clients: It is recommended that new clients make a request for an estimate of coverage and premium under the New Crop Insurance Initiative (NCII) as soon as a decision is made to grow the crop. A request for an estimate is not a purchase commitment. AFSC will evaluate eligibility for insurance from the application. Required information includes Social Insurance Number or Business Number, legal land descriptions where NCII crops will be grown and the number of acres on each land location.

Land Report: Clients must contact their branch and complete a separate New Crop Insurance Initiative Land Report once seeding is finished or by June 20, along with their Crop Insurance Land Report.

Statement of Coverage and Premium: Land information is keyed to generate a Statement of Coverage and Premium which explains coverage, premium and states AFSC’s liability limit. Clients should review the billing carefully to ensure it is complete and accurate. Errors and omissions must be reported to AFSC within 15 calendar days of receipt. AFSC reserves the right to deny additional liability when information contained on the Statement of Coverage and Premium reflects what is reported on the Land Report.

Unseeded Acreage Benefit: Clients should contact a branch to file their Land Report and report any unseeded acres no later than June 20 with the following information:

  • All legal land locations (reported separately by quarter section) that have unseeded acres
  • For each quarter section:
  • Total number of cultivated acres;
  • Number of dryland unseeded acres, and irrigated unseeded acres;
  • Number of acres seeded;
  • Number of acres intended for summerfallow;
  • Number of acres in hay and pasture;
  • Number of acres released for reseeding that could not be reseeded due to excessive moisture; and
  • Whether or not fertilizer was applied, on a field by field basis.

AFSC will verify the total number of acres that qualify for an unseeded acreage claim and determine the level of payment by confirming field preparation expenditure.

Hail and fire damage: For damage of 10 per cent or more under either Hail Endorsement or Straight Hail Insurance programs, clients must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

AFSC requires the following information when a report of hail damage is filed:

  • The legal location, crop type and number of acres effected;
  • The date of the storm; and
  • Estimate of the percentage of damage for each crop.

Clients should inspect fields, identify hail damaged areas, and accompany the inspector to damaged acres. Inspectors may wait to adjust a claim so that damage is more accurately identified. Claims may be deferred if crops are not sufficiently mature for accurate damage to be assessed.

If the crop is damaged when mature enough to swath or harvest, clients may be advised to leave representative inspection strips or swaths for inspectors to use to assess the damage. For information on size and number of strips, see the Inspection Strips resource on AFSC.ca.

Harvested Production Report: A separate New Crop Insurance Harvested Production Report is required to be completed by the client along with their Crop Insurance Harvested Production Report. Production for New Crop Insurance Initiative crops must be stored separately from other production, otherwise production will be prorated and the yield for the crop will not be used to update New Crop Insurance Initiative  coverage.

AFSC will be requesting additional information regarding seeding, spraying and harvesting of new crops. If a client refuses to provide the required yield and/or organic information, the yield will not be used for the updating of their coverage, and AFSC, in its discretion, may deem other actions necessary.

Silage Greenfeed Insurance

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Area-based programs are an alternative for silage crops and do not require preharvest or post-harvest field inspections. Field inspections are required for hail to assess damage for Hail Endorsement and Straight Hail Insurance, and field inspections are usually required to release acres for reseeding and for acres left unseeded. Clients need to contact AFSC in any of these three circumstances.

Since individual production does not trigger the loss, the list of crops that can be insured as silage under an area-based approach can be expanded from those eligible under a production-based design.

This section outlines the two area-based Silage Greenfeed Insurance options for crops grown for silage and greenfeed:

  • Barley Proxy (BP)
  • Lack of Moisture (LOM)

Crops seeded for the purpose of silage or greenfeed:

  • All fall, winter and spring cereals
  • Corn
  • Peas
  • Faba beans
  • Lupines
  • Italian rye grass
  • Annual rye grass
  • Millet
  • Sorghum
  • Sorghum – Sudan grass
  • Feed turnips
  • Cocktail crops: Any percentage mixture of the above crops. Fields are insured based upon the majority crop type in the mix:
    • Cereal mix
    • Pulse mix
    • Oilseed mix
  • Any mixture of a minimum of three crops meeting the following criteria:
    • Primary crop is a single insurable crop under the Insuring Agreement;
    • Primary crop is a single crop type comprising of 35 per cent or more of the plant population; and
    • No single crop not included in the Insuring Agreement can composes of more than 20 per cent of the plant population

Coverage is based on a proxy crop, regardless of the option chosen, and is equal to the 80 per cent coverage level offered for barley under the production insurance program at the spring insurance price. The township barley dollar coverage applies to all the silage and greenfeed crops except corn, which has an additional $50 per acre coverage. See each option for a more in depth description of coverage.

Clients who intend to harvest some of the acres as grain and harvest a portion as silage or greenfeed can insure acres under both production insurance and the Silage Greenfeed Insurance program.

Additional insurance available: Hail Endorsement offers spot-loss payments for damage due to hail, accidental fire and fire caused by lightning. When this option is purchased and the insured crop suffers 10 per cent or more damage, the client is eligible for a payment, based on the percentage of loss on the damaged acres.

Auto-Elect Straight Hail offers an option to purchase Straight Hail Insurance at the same time coverage is elected for Silage Greenfeed on or before April 30, and in advance of seeding crops.

Variable Price Benefit: For both options, the Variable Price Benefit is automatically included and compensates clients in a loss situation when the fall market price of barley increases 10 per cent or more from the spring insurance price to the fall market price. The Variable Price Benefit is limited to a maximum increase of 50 per cent above the spring insurance price set for 1 CW barley under production insurance.

Barley is used as a proxy for Silage Greenfeed crops because, historically, the price of silage tends to move with barley.

Spring Price Endorsement: The Spring Price Endorsement offers protection for within-year price declines of more than 10 per cent between the spring insurance price and the fall market price. The Spring Price Endorsement is limited to a 50 per cent change. Once triggered, it will pay back up to 90 per cent of the spring insurance price on production produced, or deemed to be produced, up to the coverage elected. Information on the Spring Price Endorsement can be found in the Spring Price Endorsement section.

Premium rates are set annually and reflect AFSC’s risk of future losses.

For the Barley Proxy option, premium rates are based on the area-wide production losses of feed grains under Crop Insurance.

For the Lack of Moisture option, premium rates are based upon long term weather station data. Premium rates vary by weather station.

For both options, client premium is calculated by multiplying the dollar coverage by the client’s share of the premium rate and applying any applicable discounts.

 

Reseeding: Crops insured under the Silage Greenfeed Insurance program are eligible for the Reseeding Benefit if they are eligible under Crop Insurance.

The cost of the Reseeding Benefit is included with Silage Greenfeed Insurance premium, so separate premium is not required for reseeded acres.

The Reseeding Benefit provides compensation on a spot-loss basis for acres damaged on or before June 20 by designated perils, and is intended to partially compensate clients for the cost of reseeding the original crop.

The reseeding claim is paid according to the amount of the benefit payable on the original insured crop. The reseeded crop can be insured provided it was elected before April 30 and seeded according to seeding guidelines, and by the seeding deadline for the crop to which the acres were reseeded.

There is no limit to the number of reseeding claims that can be submitted on the same land. However, AFSC will only pay on land that has been released for reseeding.

Reseeded acreage benefit values and minimum acreage requirements for all insurable crops are listed in the Program Specifics by Crop table.

Unseeded Acreage Benefit: The Unseeded Acreage Benefit is included with Silage Greenfeed Insurance.

The cost of the Unseeded Acreage Benefit is included with Silage Greenfeed Insurance premium, so separate premium is not required for unseeded acres.

The Unseeded Acreage Benefit provides compensation on a spot-loss basis for acres unseeded due to excess moisture. This benefit is intended to partially compensate clients for the direct and indirect costs of seedbed preparation when seeding is prevented due to excess moisture.

  • Barley Proxy: acres that remain unseeded as of June 20.
  • Lack of Moisture: acres that remain unseeded as of July 15.

Basic eligibility criteria: To qualify for this benefit, clients must have an active area-based insurance contract and acres must be unseeded due to excess moisture.

The total number of acres intended to be seeded must have been declared by April 30. Land that is rented or purchased after April 30 but before June 1 is eligible with written proof (a copy of the signed rental agreement or bill of sale) if submitted to AFSC by June 1.

There is a five per cent deductible on all cultivated acres per quarter section.

To qualify for this benefit, the unseeded acreage must be land that meets at least one of the following criteria:

  • Intended to be seeded for crop, silage and/or greenfeed (insured and uninsured);
  • In hay or pasture the previous year and that was either worked or sprayed at a rate sufficient to kill that crop and intended to seed to a spring crop in the current year (insured and uninsured);
  • Unharvested (snowed under) the previous year and is intended to be harvested in the spring prior to seeding a spring crop;
  • Qualify for a Reseeding Benefit and could not be reseeded on or before June 20 due to excessive moisture.

Note: AFSC may deny coverage on land where flooding or excess moisture is a recurring problem.

Levels of payment: There are four levels of unseeded acreage benefit payments and each level has different eligibility requirements:

  • Level 1: Dryland $49 per acre – compensates for direct costs (rent, land taxes and interest), land preparation (cultivation, harrowing, herbicide application and chemical fallow) and following year land maintenance;
  • Level 2: Dryland $108 per acre – compensates for Level 1 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required);
  • Level 3: Irrigated $107 per acre – compensates for direct costs (rent, land taxes and interest), land preparation, (cultivation, harrowing, herbicide application and chemical fallow), irrigation water rights and following year land maintenance;
  • Level 4: Irrigated $179 per acre – compensates for Level 3 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required).

Benefits are capped at the lesser of $108 per acre for dryland and $179 per acre for irrigated acres; or 50 per cent coverage level offered under production insurance program for the client’s predominant dryland and irrigated crops.

Note: Payments under the Unseeded Acreage Benefit can impact premium adjustments under production insurance.

Hail and fire damage: The Hail Endorsement and Straight Hail Insurance provide spot-loss coverage for damage due to hail, accidental fire and fire by lightning. When the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres.

Clients who purchase the Hail Endorsement or Straight Hail Insurance, including Auto-Elect Straight Hail, must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

Clients are to check insured fields to identify the damaged areas prior to filing a claim and are expected to take the inspector to damaged fields when the damage assessment is completed. When the initial assessment is less than 10% and clients request a re-inspection, clients may be charged an hourly rate plus mileage.

Barley Proxy Option (BP)

Coverage is available in all 22 risk areas of the province for dryland or irrigated crops and uses a proxy crop  based on the 80 per cent coverage level offered for barley under Crop Insurance.

Causes of loss: Damage caused by designated perils to the insured feedgrains in the immediate geographic area (proxy area).

Indemnity: Compensation for barley proxy losses is based on the claim rate of feedgrains clients insured under crop insurance in the immediate geographic area (proxy area).

Feedgrains are defined as barley, mixed grain, oats, spring rye and spring triticale.

The proxy area for the BP option depends on the number of clients insuring feedgrains under production based insurance. The proxy area is:

  • The township where silage and greenfeed is grown if there are at least six clients insuring feedgrains under Crop Insurance in that township; or
  • If there are fewer than six clients insuring feedgrains in the township, the size of the proxy area is increased by adding surrounding townships until it contains at least six clients insuring feedgrains under Crop Insurance.

The claim rate for the proxy area is based on:

  • The total production coverage at the 80 per cent level for all feedgrains insured by clients under Crop Insurance in the proxy area, and
  • The total production, excluding grade adjustments, for all feedgrains clients insured under Crop Insurance in the proxy area.

Note: Grade is not considered in the proxy option because, in most cases, factors that affect grade occur after the time that crops have been cut for feed.

 

In the example above, the proxy area has seven clients insuring feedgrains under Crop Insurance. Their total production coverage is 147,960 bushels, and their actual production for the year is 71,021 bushels, indicating a production loss of 52 per cent compared to the total production coverage for the program.

If the total dollar coverage for a client under the proxy option was $30,000 ($150 per acre x 200 acres), the client would receive an indemnity payment of $15,600 ($30,000 x 52%).

 

Lack of Moisture option

Coverage: Coverage is available for dryland crops in all 22 crop risk areas in the province. The Lack of Moisture option compensates clients when accumulated moisture at a selected weather station(s) falls below 80 per cent of the historical moisture (normal) at that weather station(s). The greater the shortfall of moisture, the higher the payment rate.

There are four points clients need to consider when insuring with the Lack of Moisture option:

  • Weather station(s) – Clients choose up to three weather stations from the network of eligible weather stations for insurance which best represent the conditions on their farm (see Weather Station Network maps under www.afsc.ca);
    • If more than one weather station is elected, the premium and payment rate will be the average of the premium and payment rates for the stations elected.
  • Moisture components – The insurance policy includes precipitation from available options of May, June, July, and August.
  • Weighting is the degree to which the moisture components will count in the insurance policy. Weighting options are illustrated in the Weighting Options table on this page.
  • Insured acres – Clients are required to elect the number of acres they intend to insure under the Lack of Moisture option by the April 30 deadline and report the location and number of acres seeded and intended to be seeded by June 20.

The client must elect the number of acres they intend to insure by April 30 and will be billed within plus or minus 10 per cent of that number whether the acres are seeded or not. The Statement of Coverage and Premium will be based upon the average premium of the acres that were seeded.

Weather stations : A network of weather stations is established across the province. The long-term normal precipitation for weather stations is available to clients.

Several weather station sources are used to gather precipitation data for the Lack of Moisture option, including: Environment Canada, and the Alberta Ministries of Agriculture and Forestry (AF), Environment, and Sustainable Resource Development. All precipitation data used for this program is checked and validated by AF.

Only rainfall from May to August is considered for Lack of Moisture. Rainfall for the current year is compared to historical rainfall (normal) for the same growing period at the weather station(s) selected to determine a claim.

Rainfall used to calculate a claim payment for the current year is limited by the following rules:

  • Daily rainfall is limited to that month’s normal monthly precipitation from past years’ records for the weather station(s); and
  • The current year monthly rainfall is limited to 1.5 times that month’s normal rainfall.

Disclaimer: Daily precipitation measurements under 0.1 mm will be considered 0.0 mm, and will not be included in determining the precipitation for the month.

Indemnity: Precipitation is recorded at the weather station(s) selected. Precipitation in millimeters (mm) at the weather station for the current year is compared to the normal precipitation in mm recorded for the same weather station(s). Both the actual and normal amounts are weighted by the option selected at the same weather station(s). This comparison describes a ‘percentage of normal’, which, if less than the threshold of 80 per cent of normal, initiates a claim payment.

The Payment Schedule table below shows how the payment increases as current year’s moisture falls below the threshold. Every client who chooses the same weather station(s) and moisture weighting option will receive the same payment rate.

 

Renewals: Clients who purchased Silage Greenfeed Insurance will be automatically renewed based upon the previous year’s information excluding number of elected acres. Personalized renewal notices are available in March. Clients are responsible to review the information, complete the Change Request Form online if changes are required or return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by April 30. Clients must report the number of acres intended to be insured as silage by April 30.

The Hail Endorsement may be purchased with Silage Greenfeed Insurance by April 30. Auto-Elect Straight Hail may be purchased by April 30. Straight Hail Insurance can be purchased throughout the growing season.

Cancellations: Silage Greenfeed Insurance is continuous and remains in effect from year to year unless cancelled in writing or on a Change Request form by the client on or before April 30.

New clients : New clients must apply for Silage Greenfeed Insurance on or before April 30 and AFSC will evaluate eligibility for insurance. Required information includes Social Insurance Number or Business Number, legal land descriptions of land where silage greenfeed  crops will be grown and the number of acres on each location. Clients will need to select weather station(s), a coverage option, the number of acres intended for seeding to Silage Greenfeed and can elect Hail Endorsement, Spring Price Endorsement and Auto-Elect Straight Hail option.

Deferrals: Clients must notify their branch to defer an indemnity, prior to indemnities being issued.

Land Report: Land Report must be filed by June 20, stating the crops, locations and number of acres that are seeded and acres intended to be seeded.

  • Barley Proxy: Acres seeded by June 20 are eligible for insurance.
  • Lack of Moisture: Acres seeded and intended to be seeded by July 15 are eligible for insurance.

Statement of Coverage and Premium: Silage Greenfeed land information is keyed to generate a Statement of Coverage and Premium (billing) which explains coverage and premium and reflects AFSC’s liability limit. Clients should review the billing carefully to ensure it is complete and accurate. Errors and omissions must be reported to AFSC, within 15 days of receipt. Accuracy is important. AFSC reserves the right to deny additional liability when information contained on the Statement of Coverage and Premium reflects what is reported on the Land Report.

Seeding deadlines

Barley Proxy – June 20 for all crops.

Lack of Moisture – The seeding deadline for all crops is July 15. The Land Report must be filed by June 20 on acres seeded as well as the locations and number of acres that are intended for seeding between the time the land report is filed, and July 15. When finished seeding, and not later than July 18, if seeded acres differ from reported acres, the client must contact the AFSC branch office to revise the total seeded acres. Clients will be billed based upon reported acres limited to plus or minus 10 per cent of elected acres.

Seeded acres change from elected acres (Lack of Moisture): If seeded acres are:

  • Within plus or minus 10 per cent of elected acres, the client is billed and insured for what is seeded;
  • Less than 90 per cent of elected acres, the client is billed for 90 per cent of the acres elected, and indemnities are based on seeded acres; and
  • More than elected acres, coverage is limited to 110 per cent of the elected acres, and the client is billed for 110 per cent of the elected acres.

Exception: If crops are eligible for the Unseeded Acreage Benefit, the client will be billed for the acres actually seeded to eligible Silage Greenfeed crops.

Reseeding: Clients are required to notify AFSC of intent to reseed an insured crop. Clients should contact their branch prior to reseeding and on or before June 20, and provide the following information:

  • Legal land locations;
  • Insured crop that is damaged;
  • Crop intended to be reseeded;
  • Number of acres to be reseeded; and
  • The cause of loss.

Either an inspector will inspect the acres to be reseeded or approval will be given by the branch to reseed.

Once reseeding is complete, the branch must be contacted, and an inspector will confirm the actual number of released acres prior to payment.

Note: For both Barley Proxy and Lack of Moisture options, reseeding benefits do not apply to crops reseeded after June 20.

Unseeded Acreage Benefit

Barley Proxy: Clients should file their Land Report no later than June 20 to file an unseeded acreage claim for acres that remain unseeded due to excess moisture.

Lack of Moisture: Clients should file their Land Report no later than June 20 to file an unseeded acreage claim for acres that are unseeded due to excess moisture. Clients also need to confirm with the branch that reported acres remained unseeded due to excess moisture after July 15.

For both BP and LOM, provide the following information:

  • All legal locations (reported separately by quarter section) that have unseeded acreage;
  • For each quarter-section:
    • Total number of cultivated acres;
    • Number of dryland unseeded acres and irrigated unseeded acres;
    • Number of acres seeded;
    • Number of acres intended for fallow;
    • Number of acres in hay and pasture;
    • Number of acres which could not be reseeded due to excessive moisture; and
    • Whether or not fertilizer was applied, on a field-by-field basis.

AFSC will verify the total number of acres that qualify for an unseeded acreage claim and determine the level of payment by confirming field preparation expenditures.

Hail and fire damage: For damage of 10 per cent or more under either the Hail Endorsement or the Straight Hail Insurance program, clients must file a claim online through AFSC Connect or contact an AFSC branch office within 14 calendar days of the hailstorm or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

AFSC requires the following information when a report of hail damage is filed:

  • The date of the storm;
  • The number of acres affected, crop type, legal location; and
  • Estimate of the percentage of damage for each crop.

Clients should inspect fields, identify damaged areas, and be able to accompany the inspector to damaged acres. Inspectors may wait to adjust a hail claim so that damage is more accurately identified. Claims may be deferred if crops are not sufficiently mature for accurate damage to be assessed.

If the crop is damaged when mature enough to swath or harvest, clients may be advised to leave representative inspection strips or swaths for inspectors to use to assess the damage. For information on size and number of strips, see the Inspection Strip resource on AFSC website.

Corn Heat Unit Insurance

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Corn Heat Unit Insurance is an area-based program which provides protection against a lack of heat for irrigated corn. Actual production of corn on the farm does not affect a claim payment.

Irrigated corn grown for grain and silage.

Grain corn and silage corn are treated as separate crops, so a client can choose to insure one or the other, or to insure both. Once elected though, the entire acreage of that crop must be insured.

Corn Heat Units are calculated from temperature measured at the insurable weather stations on a daily basis beginning on May 15. Corn Heat Units for the growing season are the total of the daily calculations. The daily calculations continue to accumulate until the earlier of the first killing frost, defined as a temperature of less than or equal to -2°C, or September 30, after a minimum of 700 corn heat units have accumulated, usually by late June.

Corn Heat Units formula:
The Celsius-based formula used to calculate daily Corn Heat Unit is:
[1.800 (C1 – 4.4) + 3.330 (C2 – 10) – 0.084 (C2 – 10) 2] ÷ 2

Where:
C1 is the daily Celsius minimum temperature (set at 4.4 if C1 is less than 4.4); and
C2 is the daily Celsius maximum temperature (set at 10 if C2 is less than 10).
The lowest daily value for a CHU is 0.

Weather stations: Clients choose an insurable weather station near their farm that best represents the temperatures on their farm.

Additional insurance benefits available: Hail Endorsement offers spot-loss payments for damage due to hail, accidental fire and fire caused by lightning. When this option is purchased and the insured crop suffers 10 per cent or more damage, the client is eligible for a payment, based on the percentage of loss in the damaged areas.

Auto-Elect Straight Hail offers an option to purchase Straight Hail Insurance at the same time coverage is elected for Corn Heat Unit Insurance, on or before April 30, and in advance of seeding crops. Additional information on Hail Endorsement can be found in the Hail Endorsement section.

Clients choose dollar coverage per acre, in $25-per-acre increments, within program limits. The maximum insurable value will be set annually using the current year’s grain corn normal yield and the spring insurance price for grain corn and commercial barley.

Variable Price Benefit: The Variable Price Benefit is automatically included and compensates clients in a loss situation when the fall market price of barley increases 10 percent or more from the spring insurance price to the fall market price. The Variable Price Benefit is limited to a maximum increase of 50 per cent above the spring insurance price set for barley under Crop Insurance.

Barley is used as a proxy for the Corn Heat Unit silage corn crops because, historically, the price of silage corn tends to move with barley.

Spring Price Endorsement: Spring Price Endorsement offers protection for within-year price declines of more than 10 per cent between the spring insurance price and the fall market price. The Spring Price Endorsement is limited to a 50 per cent change. Once triggered, it will pay back up to 90 per cent of the spring insurance price on production produced, or deemed to be produced, up to the coverage elected. Refer to the Spring Price Endorsement section for further information.

Premium rates are based upon historical corn heat unit data at the low Corn Heat Unit threshold option. A risk factor is used to set premium rates for the high threshold option.

Premium is calculated by multiplying dollar coverage chosen per acre by the number of acres insured. That total is then multiplied by the premium rate for the selected weather station and Corn Heat Unit threshold option.

Lack of heat during the growing season plus a provision for late frost in the spring.

Clients can choose between two Corn Heat Unit insurance triggers or threshold options (high and low). Payments begin sooner under the high threshold option, so the cost of this choice is more than for the low threshold option.

Claims are based on accumulated Corn Heat Units (CHU) calculated using the temperature data recorded at the selected weather station. Corn heat units accumulated before the killing frost are compared to the threshold chosen by the client at the weather station. If the annual corn heat unit are less than the chosen threshold, the insurance program starts to make payments.

Assumption:

140 acres of silage corn is insured at $300 per acre, which results in $42,000 coverage
High threshold option is chosen with 2,280 CHU
The accumulated CHU at Brooks, the chosen weather station, are 2,090 in the current year

Indemnity calculation:

Corn Heat Unit shortfall (2,280 – 2,090) = 190
190 CHU is <200 = 30% payment rate

With a payment rate of 30%, the client would receive an indemnity of:
30% x $42,000 = $12,600

Late spring frost indemnity calculation

The main peril is lack of heat during the growing season. However, this insurance plan also includes a provision for late spring frost, which can set back corn plant growth and impact production. To trigger this provision, a temperature of less than zero degrees Celsius (0°C) has to be recorded:

On or after June 1 and
Prior to 700 CHUs being recorded at the weather station.

If both these conditions are met, 50 CHUs will be deducted from the accumulated total CHUs at the end of the year for the first day. An additional 15 CHUs will be deducted for every other day between June 1 and the day the frost in question occurred.

Late spring frost indemnity example:

Assume:
High threshold option of 2,220 CHUs at Iron Springs was chosen
A temperature reading of -1°C on June 3 when 589 CHUs have been accumulated at the weather station
Total CHUs at the end of the year are recorded as 2,150 at Iron Springs

CHU deduction for late spring frost:
(1 day x 50) + (2 days x 15) = 80 CHUs
The 2,150 is reduced by 80 to see if there is a payment: 2,150 CHUs – 80 CHUs = 2,070 CHUs
2,220 – 2,070 = 150

The payment rate in this example is 24 per cent at Iron Springs for a high threshold election.

Unseeded Acreage Benefit: The Unseeded Acreage Benefit is included with Corn Heat Unit Insurance. The cost of the Unseeded Acreage Benefit is included with Corn Heat Unit Insurance premium, so separate premium is not required for unseeded acres.

The Unseeded Acreage Benefit provides compensation on a spot-loss basis for acres unseeded due to excess moisture as of June 20. This benefit is intended to partially compensate clients for the direct and indirect costs of seedbed preparation when seeding is prevented due to excess moisture.

Basic eligibility criteria: An active area-based insurance contract for annual crops exists and there is an inability to seed by June 20 due to excess moisture.

The total number of acres intended to be seeded must have been declared by April 30. Land that is rented or purchased after April 30 but before June 1 is eligible with written proof (a copy of the signed rental agreement or bill of sale) provided to AFSC by June 1. There is a five per cent deductible on all cultivated acres per quarter section.

To qualify for this benefit, the unseeded acreage must be land that meets at least one of the following criteria:

  • Intended to be seeded for crop, silage or greenfeed (insured and uninsured);
  • In hay or pasture the previous year and that was either worked or sprayed at a rate sufficient to kill that crop and intended to seed to a spring crop in the current year (insured and uninsured);
  • Unharvested (snowed under) the previous year and is intended to be harvested in the spring prior to seeding a spring crop; or
  • Qualified for a reseeding benefit and could not be reseeded on or before June 20 due to excessive moisture.

Note: AFSC may deny coverage on land where flooding or excess moisture is a recurring problem.

Levels of payment: There are four levels of payment and each level has different eligibility requirements:

  • Level 1: Dryland $49 per acre – compensates for direct costs (rent, land taxes and interest), land preparation (cultivation, harrowing, herbicide application and chemical fallow) and following year land maintenance;
  • Level 2: Dryland $108 per acre – compensates for Level 1 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required);
  • Level 3: Irrigated $107 per acre – compensates for direct costs (rent, land taxes and interest), land preparation, (cultivation, harrowing, herbicide application and chemical fallow), irrigation water rights and following year land maintenance;
  • Level 4: Irrigated $179 per acre – compensates for Level 3 costs plus pre-plant incorporation of fertilizers (confirmation receipts may be required).

Benefits are capped at the lesser of $108 per acre for dryland and $179 per acre for irrigated acres; or 50 per cent coverage for the client’s predominant dryland and irrigated crops.

Note: Payments under the Unseeded Acreage Benefit can impact premium adjustments under the basic Crop Insurance policy.

Hail and Fire Damage: The Hail Endorsement and Straight Hail Insurance provide spot-loss coverage for damage due to hail, accidental fire and fire by lightning. When the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres.

Clients who purchase the Hail Endorsement or Straight Hail Insurance, including Auto-Elect Straight Hail, must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

Clients are to check insured fields to identify the damaged areas prior to filing a hail claim and are expected to take the inspector to damaged fields when the damage assessment is completed. When the initial assessment is less than 10% and clients request a re-inspection, clients may be charged an hourly rate plus mileage

New clients: New clients must apply for Corn Heat Unit insurance on or before April 30 and AFSC will evaluate eligibility for insurance. New clients are required to demonstrate their legal, financial and operational independence. Required information includes Social Insurance Number or Business Number, legal land descriptions of land where Corn Heat Unit  crops will be grown and the number of acres on each location.

Clients will also need to select the crop, dollar coverage, a low or high threshold, weather station, and can elect Hail Endorsement, Spring Price Endorsement and Auto- Elect Straight Hail option.

Land Report and Statement of Coverage and Premium: Clients must contact their branch and complete a Land Report once seeding is finished or by June 20.

Land information is keyed to generate a Statement of Coverage and Premium which explains coverage and premium and states AFSC’s liability limit. The Statement of Coverage and Premium must be reviewed carefully to ensure it is complete and accurate. Errors and omissions must be reported to AFSC within 15 days of receipt.

Accuracy is important. AFSC reserves the right to deny additional liability when information contained on the Statement of Coverage and Premium reflects what is reported on the Land Report.

Seeding deadlines: May 15 – Grain Corn; May 31 – Silage Corn

Unseeded Acreage Benefit: Clients should contact a branch office to file the unseeded acreage claim no later than June 20 to provide the following information:

  • All legal locations (reported separately by quarter section) that have unseeded acreage;
  • For each quarter section:
    • Total number of cultivated acres;
    • Number of dryland unseeded acres, and irrigated unseeded acres;
    • Number of acres seeded;
    • Number of acres intended for fallow;
    • Number of acres in hay and pasture;
    • Number of acres which could not be reseeded due to excessive moisture; and
    • If fertilizer applied, on a field-by-field basis.

AFSC will verify the total number of acres that qualify for an unseeded acreage claim and determine the level of payment by confirming field preparation expenditures.

Hail or fire damage: For damage of 10 per cent or more under either Hail Endorsement or Straight Hail Insurance, clients must file a claim through AFSC Connect or contact AFSC within 14 calendar days of the hailstorm or fire.

AFSC requires the following information when a report of hail damage is filed:

  • The legal location, crop type and number of acres effected;
  • The date of the storm; and
  • Estimate of the percentage of damage for each crop.

Clients should inspect fields, identify hail-damaged areas, and accompany the inspector to damaged acres. Inspectors may wait to adjust a claim so that damage is more accurately identified. Claims may be deferred if crops are not sufficiently mature for accurate damage to be assessed.

If the crop is damaged when mature enough to swath or harvest, clients may be advised to leave representative inspection strips or swaths for inspectors to use to assess the damage. For information on size and number of strips, see the Inspection Strips resource on the AFSC website.

Endorsements

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Spring Price Endorsement is purchased as an endorsement on a crop-specific basis. It cannot be purchased at the 50 per cent coverage level for Crop Insurance. Spring Price Endorsement offers protection for within-year price declines of more than 10 per cent between the spring insurance price and the calculated fall market price. The Spring Price Endorsement is limited to a maximum decline of 50 per cent.

What Can be Insured

See the Fall Market Price Methodology table for a list of crops eligible for the Spring Price Endorsement.

Coverage

For Crop Insurance, the Spring Price Endorsement provides clients with protection, on a crop-specific basis, from within-year price declines on production that is grown, up to the coverage purchased, at 90 per cent of the spring insurance price.

For Silage Greenfeed and Corn Heat Unit Insurance, the Spring Price Endorsement provides clients with protection from within-year price declines on deemed production up to the coverage purchased, at 90 per cent of the spring insurance price.

Price

The spring insurance price is a forecast of the average market price for the coming crop year. In late January every year, the Market Analysis Division and the Crop Insurance and Companion Programs Division of Agriculture and Agri-Food Canada, in conjunction with the provincial Price Review Committee, set a price for each insured crop’s designated grade.

The spring insurance price is multiplied by the coverage level chosen under Crop Insurance to determine client’s dollar coverage at the start of the year. It is also used in the calculation of dollar coverage for the Silage Greenfeed and Corn Heat Unit Insurance programs.

The fall market price for Spring Price Endorsement is the same price used for the Variable Price Benefit. The methodology to determine the price for each insured commodity can be found in the Fall Market Price Methodology table. For production-based products, grade factors for each crop are determined at the same time as the fall market prices.

Premium

Spring Price Endorsement is only available in Alberta. The provincial government pays all administration expenses and shares premium costs with clients. There is no federal government support for this endorsement.

Premium rates are based upon a blend of historical Spring Price Endorsement data and a risk assessment of the current spring insurance price.

Client premium is calculated by multiplying the dollar coverage by the client’s share of the premium rate, and applying any applicable premium adjustments.

Indemnity

For clients with Crop Insurance and/or Barley Proxy option for Silage Greenfeed Insurance, to prevent overpayment, yields must be gathered and production losses paid before Spring Price Endorsement payments can be calculated.

Production-based insurance: Spring Price Endorsement offers protection for price within-year declines of more than 10 per cent between the spring insurance price and the calculated fall market price. Spring Price Endorsement is limited to a maximum decrease of 50 per cent below the spring insurance price.

Payments are calculated on the difference between 90 per cent of the spring insurance price and the calculated fall market price, multiplied by the total production grown up to the coverage level elected under Crop Insurance.

‘Production grown’ means harvested production and appraised potential production of a crop adjusted for dockage, moisture, and grade (relative to the designated grade) and excludes volunteer production and production due to uninsured causes of loss.

Assumption:

Client’s normal yield is 40 bushels per acre.
Spring insurance price is $10 per bushel.
70 per cent coverage was chosen under Crop Insurance, which provides 28 bushels per acre protection.
Calculated fall market price is $8 per bushel.
Within the year, price declined by 20 per cent [($10 per bushel – $8) / $10 per bushel].

Example 1  provides an instance where:
The client’s production this year is 34 bushels per acre, so there is no production shortage;
SPE triggers as the decline is greater than 10 per cent; and
SPE pays on the amount of crop that is grown up to the insurance coverage.

Payment calculation is:
28 bushels per acre x [($10 x 90%) – $8] = $28 per acre

Note: This program assumes a client can sell the production for the fall market price. If the client does not, there is no provision to make up the difference. If client sells their production for more than the fall market price, there is no offset against program payments.

Example 2 provides another instance where the same client suffers a production shortfall:

The client’s production is 20 bushels per acre, so there is a production shortfall
28 – 20 = 8 bushels per acre

There is a crop shortfall and Crop Insurance guarantees the spring insurance price for production below coverage.

The Crop Insurance payment is: (28 – 20) x $10 = $80 per acre

SPE pays on the amount of crop that is grown so the payment calculation is:
20 x [($10 x 90%) – $8] = $20 per acre

Indemnity

Area-based insurance: Spring Price Endorsement is purchased as an endorsement at the subscription level. The Spring Price Endorsement offers protection for within-year price declines of more than 10 per cent from the spring insurance price to the calculated fall market price set for 1 CW barley under Crop Insurance. The Spring Price Endorsement is limited to a maximum decline of 50 per cent.

Under Silage Greenfeed and Corn Heat Unit Insurance, production on the farm has no impact on the programs, yet the Spring Price Endorsement pays on what is assumed to be grown, up to coverage, at 90 per cent of the spring insurance price.

The following examples show how AFSC defines ‘assumed to be grown’ for Corn Heat Units.

Assumption

A client has insured grain corn under the Corn Heat Unit program and has coverage of $300 per acre.

Example 1:
There is no shortage of heat units, therefore no production shortfall assumed;
The fall market price for grain corn drops by 15 per cent from the spring insurance price;
The Spring Price Endorsement pays back up to 90 per cent of the spring insurance price, therefore the payment rate calculates at five per cent.

In this case, since there is no payment under Corn Heat Units, AFSC assumes the client produced a crop at least equal to coverage. The Spring Price Endorsement pays for price declines on what is grown up to the coverage level chosen.

In this example, the Spring Price Endorsement payment is:
$300 per acre x (15% – 10%) = $15 per acre.

Example 2:
Now, using the same example, assume there was a heat shortage causing a program payment rate of 40 per cent. AFSC assumes that a 40 per cent payment means the client produced a crop equal to 60 per cent of coverage. The Spring Price Endorsement pays on production that is grown up to the coverage level back up to 90 per cent of the spring insurance price.

AFSC assumes the client produced a crop equal to 60 per cent of $300 per acre coverage.

In this example, the Spring Price Endorsement payment is:
$300 x 60% x (15% – 10%) = $9 per acre

Example 3: Silage Greenfeed (Barley Proxy)

Assumptions:
Coverage $150/acre
Acres insured 200 acres
Total coverage $150 x 200 = $30,000

There is a shortfall for feedgrains under Crop Insurance – Payment rate for SG is 52%
SG Indemnity = $30,000 x 52% $15,600
Spring Insurance Price $3.00/bushel
Fall Market Price has dropped 25% from the spring insurance price and is $2.25/bushel

Adjusted Price calculation is (spring price x 90%) – fall price / spring price x 100 = %
($3 x 90%) – $2.25 / $3 x 100
7 – 2.25 / 3 x 100 = 15%

Spring Price Endorsement pays when the fall price decreased by more than 10% below the spring price. As Spring Price Endorsement pays back to 90% of the spring price, the client receives the Spring Price Endorsement on their remaining coverage.

Total Coverage $30,000
Less previous SG indemnity $15,600
Remaining coverage $14,400

SPE payment = Remaining coverage x adjusted price
SPE payment = $14,400 x 15% = $2,160

The client would be paid on:
Silage Greenfeed Insurance based on the claim rate of insured feedgrain clients in the proxy area.
Spring Price Endorsement would be triggered because the barley grain price decreased by more than 10 per cent from the spring insurance price to the fall market price.

For Crop Insurance and the Barley Proxy option of Silage Greenfeed Insurance, yields must be gathered and production losses paid before SPE payments can be calculated.

Client Responsibilities

Renewal and new insurance: Clients must specifically choose Spring Price Endorsement coverage on crops when renewing or purchasing new Crop, Silage Greenfeed, and Corn Heat Unit Insurance by April 30.

Cancellations: Spring Price Endorsement is continuous and remains in effect on a crop from year to year unless removed from the crop in writing or on a Change Request form by the client on or before April 30.

Deferrals: Clients must notify their branch to defer an indemnity, prior to any indemnities being issued.

The Hail Endorsement can be purchased as an endorsement to:

  • Crop Insurance
  • Processing Vegetable Insurance
  • Silage Greenfeed Insurance
  • Corn Heat Unit Insurance
  • New Crop Insurance Initiative

Hail Endorsement provides spot-loss coverage on a crop-specific basis. The Hail Endorsement cannot be purchased at the 50 per cent coverage level for production-based insurance.

Straight Hail Insurance can be purchased on viable crops online at www.afsc.ca and at any AFSC office. Straight Hail Insurance sales open May 1.

What can be insured

Hail Endorsement eligibility for all insurable crops is listed in the Program Specifics by Crop table. Hail Endorsement will be offered on the majority of crops that are insured under the New Crop Insurance Initiative, however, AFSC reserves the right to deny Hail Endorsement coverage on crops where hail damage cannot be accurately assessed. Honey and Bee Overwintering Insurance programs are not eligible for Hail Endorsement.

Coverage

Hail Endorsement applies to the entire acreage of the crop insured and at the same dollar coverage as provided under annual crop insurance.

Insurance protection begins when the crop emerges and continues until:

  • The insurance is cancelled by the insured (can only be cancelled if there is not a claim);
  • The crop is put to another use;
  • The crop is harvested; or
  • Midnight October 31.

Premium

Hail premium ‘base’ rates are set annually based upon the historical hail loss by township. These rates vary by crop depending on the crop’s susceptibility to hail damage. The Schedule of Insurance found on www.afsc.ca, presents the rates by crop as a base rate, ¾ times base rate, 1½ times base rate, 1¾ times base rate and 2 times base rate.

Clients who elected Hail Endorsement with their annual crop insurance pay an adjusted rate of the base rate depending on the crop type. The Hail Endorsement rate is listed on the crop proposals. Client premium is calculated by multiplying the dollar coverage by the adjusted Hail Endorsement premium rate and applying any applicable premium discounts.

Causes of loss

Hail Endorsement provides spot-loss coverage for damage due to hail, accidental fire and fire by lightning. When the insured crop suffers a loss of 10 per cent or more, the client is eligible for a payment based on the percentage of loss on the damaged acres.

Claim Payment Scale:

  • No payments are made for claims less than 10 per cent;
  • Claims between 71 and 89 per cent receive a harvesting allowance up to 10 per cent. The harvesting allowance is equal to the percentage the damage exceeds 70 per cent to a maximum of 10 per cent;
  • Claims equal to or greater than 90 per cent are paid as a 100 per cent loss.

Indemnities are limited to the dollar coverage per acre under the insurance option purchased.

Examples of Hail Endorsement payments:

Assume 100 acres.
Production guarantee of 30 bushels per acre.
Spring insurance price $6.80 per bushel.
Dollar coverage (30 bu/ac x $6.80/bu) = $204 per acre

Scenario A

Assume 40 per cent hail loss; harvests 20 bushels per acre.

Hail Endorsement payment:
$204 x 40% = $81.60 per acre

Basic production payment:
30 bushels (coverage) – 20 bushels (harvested) = 10 bushels
10 bushels (shortfall) x $6.80/bu = $68 per acre

Total payment: $81.60 + $68 = $149.60 per acre

Scenario B

Assume 40 per cent hail loss; harvests 10 bushels per acre.

Hail Endorsement payment:
$204 x 40% = $81.60 per acre

Basic production payment:
30 bu (coverage) – 10 bu (harvested) = 20 bushels
20 bu (shortfall) x $6.80/bu = $136 per acre

Total payments from all sources cannot exceed dollar coverage under the basic policy. Since $81.60 per acre has already been paid under the Hail Endorsement, this means only the remaining coverage can be paid. The basic production insurance loss is limited to:

$204 (coverage) – $81.60 (Hail Endorsement) = $122.40 per acre
Total payment: $81.60 + $122.40 = $204 per acre

Client Responsibilities

Renewals and new insurance: For renewals, Hail Endorsement is automatically included on crops where it was elected the previous year. Clients are responsible to review their renewal information, complete a Change Request form online if changes are required or return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by April 30.

For new insurance, clients must specifically choose Hail Endorsement coverage on a crop by crop basis by April 30 for:

  • Crop Insurance;
  • Processing Vegetable Insurance;
  • Silage Greenfeed Insurance;
  • Corn Heat Unit Insurance;
  • New Crop Insurance Initiative.

Reporting a loss: Clients who purchase the Hail Endorsement must report a loss online through AFSC Connect or contact an AFSC branch office within 14 days after the day the crop was damaged by hail or fire. Clients may submit a hail claim by logging into their AFSC Connect account or contacting their branch office.

Clients are to check insured fields to identify the damaged areas prior to filing a hail claim and are expected to take the inspector to damaged fields when the damage assessment is completed.

AFSC requires the following information when a report of hail or fire damage is filed:

  • The legal location, crop type and number of acres effected;
  • The date of the storm; and
  • Estimate of the percentage of damage for each crop.

Clients are required to accompany the inspector during a claim inspection and to take the inspector to the damaged areas of each field. Inspectors may wait to adjust a claim so that damage is more accurately identified. Claims may be deferred if crops are not sufficiently mature for accurate damage to be assessed.

If the crop is damaged when mature enough to swath or harvest, once authorized by AFSC, clients may leave representative inspection strips or swaths for inspectors to use to assess damage. For information on size and number of strips, see the Inspection Strips resource on the AFSC website.

Cancellations  Hail Endorsement coverage on a crop is continuous and remains in effect from year to year unless removed from the crop in writing by the client on or before April 30. If a client elects Hail Endorsement, then requests cancellation after April 30, the Cancellation and Premium Refund schedule applies. All acres of a crop must be cancelled unless a portion has been put to another use and released by AFSC.

 

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