Crop insurance is a worthwhile investment for farmers because it assures security during unforeseeable misfortunes. Events like droughts, floods, and natural disasters can be tricky situations for property owners to deal with. Insurance offers support through the recovery period by covering damages and certain expenses.
An Introduction to Crop Insurance
Will farmers need to prove their production amount for crop insurance verification?
Farmers are randomly required to produce verified evidence of their production supply. The verification confirms your income to the agency in case they need to provide coverage. Your crop yield is calculated using your sales receipts, commercial storage records, and feed consumption records. Also, any claim that exceeds $200,000 will require verification credentials by regulation.
When should a farmer file for insurance?
Insurance covers your property in the case of an emergency. When it comes to your crops, you want to be prepared before disaster strikes. Getting insurance as soon as possible will ensure you aren’t on your own during a crisis.
If you notice damage to your crops due to a drought, flood, or natural disaster, a claim should be filed with an insurance agent within 72 hours. Set up your policy before a claim needs to be filed to ensure the process goes smoothly and quickly.
When can farmers expect to receive indemnity payments for their crop losses?
Indemnity payments are the amounts paid to cover losses. Claims are processed in late fall and winter, and farmers are paid when their account is processed. Depending on the number of farmers affected by the disaster, you might have to wait a few months before the payment is approved.
Can you defer indemnity payments for income tax purposes?
Farmers are contracted employees and are responsible for budgeting their own taxes. The acceptance of insurance proceeds is identified as a “sale,” and the farmer will need to pay for that portion of income.
Elect to defer your crop insurance proceeds by identifying and filing your losses. Consult with your tax consultant for personalized advice on how to account for damages.
If you need crop insurance, First State Insurance Agency has a wide selection of products to cover your assets. With locations in Lincoln, Beatrice, David City, Hickman, and Wilber, NE, they offer industry-leading customer service and will provide you with the quality care you deserve. Find the policy that fits your needs as a farmer, property owner, and family member. Visit their website to request a quote or call (402) 367-3177 to speak with a representative.