Certain CA Policies May be Impacted by Recent Water Allocations

Due to ongoing dry conditions including record low snow water content and reservoir levels as well as the recently announced water allocations from the U.S. Bureau of Reclamation, there is a known cause of loss due to drought/failure of the irrigation supply effective February 23, 2021 for insureds that receive water from the Central Valley Project and the State Water Project.

We are working on a case-by-case basis to identify policies with coverages that may not be eligible to add or increase their prevented planting coverage level (PF) or will not have prevented planting coverage this year due to drought or failure of irrigation water supply. Identical to prior years, we will be using the criteria below to identify potentially impacted policies, and once finalized, reports will be sent to the applicable agencies. 

For Transfer or Renewal Policies That Have Added PF 

Section 17(b)(4) of the Common Crop Insurance Policy, Basic Provisions states that an insured cannot increase their “elected or assigned prevented planting coverage level for any crop year if a cause of loss that could prevent planting (even though it is not known whether such cause will actually prevent planting) has occurred” during the coverage period and before the insured requests an increase.

Policies that added the PF option on or after the applicable dates specified above may have it removed. Our underwriting department will work with each of you to determine the best course of action relating to 2022 policies.

New Policies that are Not Eligible for Prevented Planting Coverage Prior to SCD

Section 17(a)(1)(i) of the Common Crop Insurance Policy, Basic Provisions states in part that for new policies, prevented planting coverage exists for an insured cause of loss that occurs “On or after the sales closing date contained in the Special Provisions for the insured crop…” Though both drought and failure of irrigation water supply are insured causes of loss, they occurred prior to the sales closing date and therefore new policies may not have prevented planting coverage for these causes.

While these new policies may not have any PP coverage for FIS or drought, they will have PP coverage for excess moisture or any other cause of loss that occurs during the insurance period (on or after SCD). Those that signed up prior to the dates specified above may be able to keep the PF option on their policy and be eligible for the additional prevented planting coverage if it occurs during the insurance period due to a covered loss. Those that signed up after the dates specified above may have the PF option removed from their 2021 policies. Again, our underwriting department will work with each of you to address your 2021 policies.