Crop Insurance Premiums Late?
(Excerpt from Agriculture.com)
When it is clear
that there are no sustantial crop loss and no indemnity payment to offset the premium, it could cross your mind not to pay
the crop insurance premium timely. But you must pay if you want to continue purchasing crop insurance.
Coverage enables operating
credit at reasonable rates, allows forward marketing of crops at potentially better prices, and protects a farm from a potential
You don't have to write the check when it is immediatley due. Following an old agricultural tradition
long dropped by other agribusinesses, the insurance premium is due near the end of a crop season instead of up front.
Your portion of the
premium is due on a specified date that varies by crop (August 15, with 45 days grace). An extension of credit is automatic
if the payment is not received within 31 days of the due date. The extension of credit is no bargain because it comes
with a hefty price tag: 1.25% per month (or any part of it) including the grace period. That's more than 15% per annum. The
automatic extension of credit has a tough, nonnegotiable payment date- a true deadline that's unforgiving.
If you do not pay
your full indebtedness by the policy cancellation date (March 15), you are placed on the Ineligible Tracking System (ITS)
to the crop insurance program going forward. Changing insurance agents, companies, or forming a new partnership or corporate
entity will not cloak your demise for long. Since you are no longer eiligble for crop insurance on the sales closing
date, no crop insurance coverage can be had. Worse yet, eligibility for this next crop year cannot be restored even
if you subsequently pay up.
Additional time to pay the premium may
be allowed by the insurer, but the payment plan must be in place before the deadline. Hearing records and decisions
of the NAD are available online. They reveal a very hard administrative line on nonpayment of premium. No matter
what you dispute, pay the premium and interest due or negotiate a repayment plan before the cancellation date.