On October 24, 2019, the Risk Management Agency (RMA) issued a press release and fact sheet regarding delayed harvest due to snowy and wet conditions. RMA advises producers to 1) contact their crop insurance agents to notify them that there has been an insurable cause of loss and that harvest is delayed by the wet weather, 2) continue normal harvest of the crop if possible, 3) document the conditions of the crop, and 4) request an extension of time to harvest the crop if harvest cannot be completed by the end of the insurance period. RMA states that the Loss Adjustment Manual allows the approved insurance providers to approve, on a case-by-case basis, the delay in harvest when the producer gives timely notice of loss, the approved insurance provider determines and documents that the delayed harvest was due to an insured cause of loss, the producer can demonstrate that it is not possible to harvest the crop due to an insured cause of loss, and the delay in harvest was not due to insufficient equipment or manpower. RMA reminds producerS that although a delay harvest is approved, the insurance period is not extended. RMA also states that any additional damage during the extension period due to an insured cause of loss is covered but any avoidable losses will be charged as appraisal against the guarantee.
ANALYSIS – There have been significant wet weather and snow in a number of states during the harvest period that has prevented or delayed harvest. The end of the insurance period is occurring soon in these states and RMA wants to ensure that affected producers can still receive indemnities even if harvest is delayed provided the conditions are met. Approval by approved insurance providers for delayed harvest is authorized by the procedures. But there is one concern. RMA states that the insurance period is not extended to allow delayed harvest but in the next sentence RMA states that any additional damage by an insured cause of loss during the extension period is covered. That sounds like the insurance period is extended. One presumes that RMA meant that any damage that occurs during the extension period from the cause of loss that delayed harvest would be covered. The damage must be due to an insurable cause of loss that occurs during the insurance period. Under the terms of the policy, any damage from causes of loss that occur after the end of the insurance period are uninsurable. However, as drafted, this is not clear.
All statements made are the opinion of the author and are not intended as legal advice or a legal opinion.