MASC will refund 50 percent of hail premiums paid on drowned-out acres.

 

Around 1400 producers will be receiving a portion of their hail insurance premiums back from Manitoba Agricultural Services Corporation.

Many growers expressed frustration with not receiving hail coverage on acres written off due to excess moisture, despite having paid full premiums for hail insurance.

Rob Brunel, president of Keystone Agricultural Producers, last week explained producers paid full premiums for hail insurance, but did not receive a payout on acres written off through excess moisture claims.

"If they had a 160 acre field and they had 5 percent flooded out, they still paid the full premium on their hail coverage, but only got paid out for the acres that were not flooded out," said Brunel. "So they paid premiums on land that they didn't receive a payment on."

MASC has now decided to refund 50 percent of each of those hail insurance premiums.

"The issue itself deals with our hail insurance contract. There's a clause in there that says if there's not a viable crop and there is a hail loss, then producers are not eligible for any compensation on areas that are affected," explains David Koroscil, manager of insurance projects and sales with MASC. "With this year, being as severe as it was, we were just following through with the policy."

"If there is no crop there, then obviously there is no crop that gets damaged in a hail storm," he says.

"Producers can get a premium refund at any time during the growing season if they decide to cancel their contract or if there is a situation like this year where acres are lost," says Koroscil. "That refund is on a pro-rated basis...after July 31st, all hail insurance premiums are considered earned and are no longer eligible for a premium refund."

He says MASC made the decision to refund a portion of the premiums due to the timing of the Canada-Manitoba Excess Moisture Assistance Program, or CMEMAP announcement. "It was approximately mid-July when the program was announced, and based on the short date hail cancellation table, premiums were about 50 percent earned at that point in time."

The total refund will be worth in excess of 600 thousand dollars.

"This is a one-time event for this year. What we're looking at doing is educating our insureds better so they are aware there is a cancellation available for them at any time throughout the growing season," says Koroscil.

~ Tuesday, October 26, 2010 ~