The Manitoba Agricultural Services Corporation is refunding $669,000 to 1,400 farmers after reviewing its policy on how to treat drowned-out acres for which farmers had purchased hail insurance.
The change means farmers will get half their MASC hail insurance premium refunded on acres enrolled in the Canada- Manitoba Excess Moisture Assistance Program (CMEMAP).
“Early in October our (MASC) board agreed we could give back half of the premium for those drowned-out acres,” Craig Thomson, MASC’s vice-president of insurance operations said in an interview Oct. 21. “Basically what we’re doing is accepting their CMEMAP application as notification of a request to do a short date hail cancellation.”
Earlier this year farmers whose crops were damaged by hail complained when they learned acres signed up under CMEMAP weren’t covered. Under CMEMAP farmers received $30 an acre for crops destroyed by excess rain, but a hail payment would pay many times more per acre.
MASC said its hail coverage doesn’t cover “non-viable crops” such as those destroyed by excess moisture. Private hail insurance providers have the same policy, Thomson said.
Farmers said in that case if those CMEMAP acres weren’t covered by hail insurance they should get their hail insurance premiums refunded.
And that’s what happened in the case of about 250 farmers who formally notified MASC by June 29 that their crop was destroyed and therefore ineligible for hail coverage.
However, farmers argued formal notification shouldn’t be necessary since MASC was administering the CMEMAP program and could find out which acres were destroyed and should qualify for a premium refund. MASC’s board agreed, Thomson said.
But the affected farmers are only eligible to half their premium back because they had hail coverage until July 19. That’s the first day farmers could apply to the CMEMAP program.
MASC and private companies use the same formula to pro-rate premium refunds, Thomson said. The longer coverage is in place, the lower the refund.
When cancelling coverage on July 19, farmers are eligible for a 43 per cent premium refund, but Thomson said MASC is rounding it up to 50 per cent. (See table.)
Keystone Agricultural Producers (KAP) president Rob Brunel said last week he thinks MASC’s action should address farmers concerns.
“I don’t see why it wouldn’t because they’re getting what they asked for,” he said.
“From my standpoint it looks like the right move and I’m glad to see that,” Brunel said. “I don’t know if we can do much more for them, quite honestly. I think they are fortunate to get this. I understand both sides.”
KAP delegates passed a resolution at their recent general council meeting to lobby MASC to cover insured acres whether or not there is a subsequent loss due to flooding or other factors.
Thomson said it’s unfortunate MASC didn’t notify KAP about the refund before its general council meeting. It didn’t because it will take some time to cross-reference farmers’ CMEMAP applications with hail insurance and refund half the premiums. In the meantime, MASC is focused on settling post-harvest claims, he said.
Thomson said farmers whose crops are destroyed due to conditions such as the province experienced last spring can maximize their premium refunds in the future by notifying the agency immediately so that their hail coverage can be cancelled.
MASC hopes to increase awareness by explaining it in a letter to the 1,400 farmers getting a hail insurance premium refund. MASC has also asked KAP to bring it to its members’ attention. [email protected] ThefollowingtablefromMASC showsthepercentageofhail insurancepremiumusedbya specificday.Thedifference between100percentand what’susedisthepercentage refundtheinsurediseligible forwhencancellingcoverage onthatdate.Thistable appliestoallinsurablecrops exceptforstrawberries,fall rye,tamehay,alfalfaseed, perennialryegrass,tallfescue, pedigreedtimothyforseed productionandwinterwheat.
“Early in October our (MASC) board agreed we could give back half of the premium for those drowned-out (CMEMAP) acres.”
– CRAIG THOMSON
June 29 and Prior
30 and After
Per cent of
Premium Earned (Used)