The Crop Insurance Audit – Are You Prepared?
You’ve suffered loss, possibly through catastrophic weather conditions, natural disaster, or maybe just an especially dry year that everyone is feeling. But this is what crop insurance is for, you’re not supposed to be at the whim of mother nature in making your livelihood. You’ve gone through the process of filing the claim, and then you receive the letter. Your claim is being audited.
Audit does not have to be the most dreaded word you can think of. Despite how it might feel at the time, a crop insurance audit is not meant to single you out. Rather, it’s a pretty standard part of having crop insurance.
Anyone who puts in a claim for over $200,000 should expect to be audited as routine, and even if you know potential claims would be smaller, it’s worthwhile to be prepared. That way, if an audit does come through, the process will be simplified.
Plus, keeping these records will pay off anytime you ever have to file a claim, as they’ll make that process easier as well.
While each state, crop, and insurance company have different requirements, there are some requirements you can count on. Here’s a layout about how to best be prepared if that audit ever does come around.
Keep and Save Records of Each Year’s Crops
The crop insurance audit always comes after the harvest, and you’ll need to produce a full record of how much you harvested, in addition to records from the previous two years. While it is to your benefit to record how much yield you have each year, it is vital that you maintain accurate records for the three most current years at all times.
How to Properly Measure a Yield
You may have a system in place for how to best gather measurements and data that works for you. But it’s important that whatever system you have in place aligns with what insurance companies require so that the data you submit will be accepted as accurate. Reevaluating your system for measuring your harvest can save a lot of time and can also make all the difference in getting paid the full amount you are owed, promptly.
Record All Crops
Whatever your crop, and wherever it is headed or has already gone, it must be accounted for. This includes crops that are destined to feed livestock, whether on your farm or at a different feed lot, crops that have been put into storage, and crops that have been sold. All of this must be distinguished from previous years’ harvest.
What Methods of Measurement Do Crop Insurers Accept?
Weight tickets that will be accepted by insurance companies should include the insured’s name, the crop being measured, and each load or ticket must have a number assigned to it. Additionally, all tickets must include:
Production Net Weight
Identification of field from which the crop was harvested
Identification and location of where crop was stored or where the crop was disposed of if no longer in storage.
It’s a great practice to weigh your crop before you put it into storage, but in addition to recording all of this data, there are some rules regarding the type of scale you use. The scale must be certified and non-portable, such as a truck scale. Scales that are built into equipment that is portable, such as a grain cart, are allowed so long as the scale prints a ticket, has an integrated display panel, and is available for inspection so that capacity can be determined.
Additional Data that Can Be Used
Load records and data from combine monitors can be used to prorate production measurement. Farmers’ data books can be used if they have regular updates of daily information and include identification of the field number, unit, date of harvest, and the truck or equipment used to move the crop. This record must also include an estimated yield in order to be accepted.
The More Data You Have, the Smoother the Crop Insurance Audit Will Go
Here are some practices that are a great idea to put into place to make the crop insurance audit go by as quickly as possible.
Keep all records well-labelled, include location of production and storage along with your FSA number
Date records meticulously. Include the date of a crop’s production in addition to the storage or disposal of the crop. Often, a crop can be produced in a year prior to the receipt of payment for the crop.
It’s a great idea to record all phases of production of each individual field.
Keep all settlement sheets neatly in a single place.
Do not co-mingle crops in measuring. If you have different insurers on different farms, you cannot combine those crops in the same measurement of weight. That’s why it’s so important to weigh crops regularly and with tickets that include all information.
Using technology is a great way to keep all of your records in order and backed up. By recording all of your information digitally, you won’t have to rely on paper copies, and applications allow you to organize all of the information more efficiently than paper files alone. Computer programs, such as our farm management system can produce a report that summarizes all of the records, making it much easier for the adjuster to process.
By following all of these tips, you can breeze through a crop insurance audit and increase the likelihood of getting a check cut faster. Be prepared ahead of time. As soon as you submit a claim, continue to keep records as you complete your harvest. As soon as your harvest is finished, gather all your records and let your adjuster know that you’re ready.
By keeping your records in order, the adjuster can settle all claims on the first visit, as opposed to having to schedule a return trip, losing your place in the line, and delaying payment further. Additionally, by keeping these records you can request that your claim is based on your own production, not on county averages. This almost always leads to larger payouts.