Hawkins, Hawkins & Burt LLP
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There are two primary types of crop insurance.
The first, and by far the largest, is Multiple Peril Crop Insurance, or MPCI. The second is called, simply, crop-hail insurance.A crop hail insurance policy is a named peril policy that covers physical damage to crops due to hail (although some policies cover additional perils such as fire). These policies are governed by state laws and regulated by state insurance departments. They can be purchased at any time during the growing season. MPCI policies also cover damage due to hail, but, in addition, cover damage due to all types of natural causes, such as drought, excessive moisture, cold and disease. The policies are governed by the Federal government through the Federal Crop Insurance Act. These policies (generally) must be purchased before the growing season. Certain private companies are authorized by the United States Department of Agriculture Risk Management Agency (RMA) to write MPCI policies. These companies are called Approved Insurance Providers (AIP). The AIPs are reinsured by the Federal Crop Insurance Corporation (FCIC). RMA manages the MPCI business on behalf of FCIC. RMA develops the policy language, sets the premium rates, interprets the policies, issues the regulations, and enforces the terms of the policy and the reinsurance agreements with the AIPs.Crop insurance litigation involving crop-hail insurance generally must be brought in state courts. MPCI disputes, however, must be arbitrated (although the parties can agree to mediate the dispute first). The dispute usually involves only the AIP, but if there is a large claim (over $500,000), RMA has the right to step in and make all decisions.Because most crop insurance disputes are resolved in mediation or arbitration, it is not necessary for the attorney representing the grower to be licensed in the state where the dispute arises or the grower is located. It is only when the dispute goes to court that state licensure becomes an issue, and even then, Mr. Burt can become licensed before a particular court on a temporary, one-time basis, or can associate with local counsel.CROP INSURANCE BASICS
