Based on the most recent water allocations by the
California Department of Water Resources
(State Water Project) and the
U.S. Bureau of Reclamation
(Central Valley Project), there was a known cause of loss due to drought/failure of the irrigation water supply for the state of California effective when the allocations were published:
- Monday, January 29, 2018 for growers that receive water from the SWP
- Tuesday, February 20, 2018 for growers that receive water from the CVP
Because there is now a known cause of loss, Global Ag is working to identify policies with coverages that are not eligible to add or increase their prevented planting coverage level (PF/SE) or will not have prevented planting coverage this year due to drought or failure of irrigation water supply. We will be using the criteria below to identify impacted policies, and once finalized, reports will be sent the applicable agencies.
For Transfer or Renewal Policies That Have Added Crop Options (PF/SE)
Section 17(b)(4) of the Common Crop Insurance Policy, Basic Provisions states that an insured cannot increase their “elected or assigned prevented planting coverage level for any crop year if a cause of loss that could prevent planting (even though it is not known whether such cause will actually prevent planting) has occurred” during the coverage period and before the insured requests an increase.
Policies that added or increased the prevented planting coverage level after the cutoff date will have those options reverted to what they were last year. Our underwriting department will work with each of you to determine the best course of action relating to 2019 policies.
New Policies that are Not Eligible for Prevented Planting Coverage
Section 17(a)(1)(i) of the Common Crop Insurance Policy, Basic Provisions states in part that for new policies, prevented planting coverage exists for an insured cause of loss that occurs “On or after the sales closing date contained in the Special Provisions for the insured crop…” Though both drought and failure of irrigation water supply are insured causes of loss, they occurred prior to the sales closing date and therefore new policies will not have prevented planting coverage for these causes.
While these new policies will not have any PP coverage for FIS or drought, they will have PP coverage for excess moisture or any other cause of loss that occurs during the insurance period. Those that signed up prior to the cutoff date will keep the PF/SE options on their policy and be eligible for payments based on those options (for covered losses). Those that signed up after the cutoff date will have the PF/SE option removed from their 2018 policies. Again, our underwriting department will work with each of you to address 2019 policies.