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Proposed Changes to Canker Insurance Policies
We have been advised by Mike Carlton (Florida Citrus Mutual) that the new canker insurance polices will be released to the insurance companies on 3/8/06 or 3/9/06. The changes to crop insurance policies include the following:
1. Stages of trees changing and amounts per stage increasing:
• Stage 1 – Old Policy: less than one year…New Policy: 1-3 years • Stage 2 – Old Policy: 1-3 years…New Policy: 4-7 years • Stage 3 – Old Policy: 4-older…New Policy: 7 years – older • Focus is on mature trees- 51% of crop is mature = all are mature • The amount per stage will increase from $26 but the new amount is unknown
2. Date on crop insurance will be changed to match date on fruit policy. (However, the date on the crop insurance will not exactly match the date on the fruit policy for this year. It will start to match May 26, 2006. The insurance companies need some time to adapt the changes to the policies and to inform their insureds.)
3. New policies will offer “Occurrence Loss Option”
• Cost adjustment for canker is calculated differently than for other perils. • Canker pays for every tree but the deducible is applied to the value of the tree not to the tree itself. Other perils must show at least 25% damage to the tree before reach deductible. • If the insured chooses the option, the canker loss deductible method applies to other perils.
4. Loss Adjustment is calculated differently for canker than for other perils. There will be a change from scaffold M Method to limb diameter method. (If limb damaged back to a certain diameter, then the tree is considered damaged.)
5. Insureds are losing out on the premium paid for crop insurance because the policy covered damage caused by other perils as well as canker. The premium paid for canker coverage is worthless now because the State stopped pushing healthy trees. In many cases, the premium will be reduced for the new policy. Basically, the old policy will convert into six month policy and the premium will be prorated with the excess being applied toward the new policy.
6. The canker premium is increasing because the rating for canker will be increasing. The rating for canker will need to be rerated after this year when the eradication requirements are definitive.
For more information contact Laura Minton Young at our Viera office # 321-259-8900.