Due to the drought and reduced yields in crops, it is expected that crop insurance claims will be up this year.

This will be dependent not only on crop yields, but coverage levels and types of policies that producers have purchased. 

Never the less, overall yields will be down, but it is yet to be determined just how much will be paid out in indemnity payments.

As of Sept. 10, 2012 there were 751,482 acres of corn in Tennessee that were covered by some type of corn crop insurance policy. So far, $1.8 million dollars of indemnity payments to be paid to producers has been adjusted out.

No doubt there will be more losses show up as corn harvest is completed.

Producers should be aware of the type policy they have related to enterprise units or optional units and to the level of coverage. For example, enterprise units average the production from the entire corn crop that an entity has in the county while optional units has each FSA farm number stand on its own.

There have been several articles written in late summer advising producers with claims over $200,000 per crop per county to be prepared for an Actual Production History (APH) audit. This amount is up from the $100,000 claim level last year that triggered the automatic audit.

If audited, producers will have to provide the actual records that were used to certify their yields from 2009 to 2011.

If you expect to have over $200,000 in claims per crop per county it will trigger an automatic audit so be prepared.

Some information indicates that indemnity payments will not be paid until the audit is completed, so there will be a financial interest in getting the data together.

For more information, contact your crop insurance agent.