Every year, certain portions of the Midwest get pounded by bad weather causing bad yields or outright crop loss.  This year, several states encountered above average rainfall preventing several million acres from being planted.  At one point this summer, Missouri alone had approximately 4 million acres of un-planted corn and soybean acres.   During times of devastating weather, many producers rely on their crop insurance policies to mitigate crop losses.  Unfortunately, crop insurance payouts can be as unpredictable as the weather.

Seemingly as random the Midwest’s bad weather patterns, every year, a number of producers will receive letters from their crop insurance companies denying their claims. You options to dispute the denial letter are limited to the crop insurance policy.  Section 20 of the Common Crop Insurance Policy requires most disputes be arbitrated if they cannot be settled otherwise.

You have one year from the date of the denial to initiate the arbitration process.  However, before sending the arbitration demand, you should take the following five steps:

First, review your policy to determine the exact provision which the insurance company has relied upon in denying your claim.  Most denial letters specify why the claim is denied and cite the policy provision which supports the insurance company’s reasoning.

Second, call the adjuster and determine whether there is any information  you may have left out or could be used to re-evaluate the claim.  Additional information may not change the insurance company’s decision but you do not want to be denied simply because you failed to produce relevant information.

Third, determine whether the value of the denied claim is worth fighting the insurance company.  Insurance companies are well equipped to defend their denials.  The cost of pursuing a claim, no matter how strong, may be more than the total value of the claim.  In the end, you have determine whether pursuing the insurance company is throwing good money after bad.

Fourth, start putting together your case by compiling the necessary official weather records evidencing the weather event which caused the loss.  Collect any and all receipts from seed and other inputs you purchased prior to planting.  Also contact an agronomist which can review the records, your documentation, and your property to provide an independent analysis of your claim and loss.  It is good to know upfront if a certified agronomist agrees with your claim before incurring the time and effort involved in arbitrating the matter.

Finally, contact your attorney.  Although lacking the formality, arbitration is similar to a full blown trial on the merits of your claim.  Therefore, you are going to want somebody trained to elicit testimony from witnesses and present evidence in a way the arbitrator will understand and accept.  Plus you will want somebody who knows how to make a record of the proceeding in case the arbitration goes bad and you have to seek a judicial review. Most importantly, any attorney worth his/her salt will give you an honest opinion of your chances at success in an arbitration hearing.

Winning an arbitration award against the insurance companies is not an easy task and success is not guaranteed even in the best cases.  Although arbitration decisions may seem as random as the weather which caused your loss, it may be your only option to recover under the policy.