It’s been five years since USDA’s Risk Management Agency first offered the crop insurance product known as Hurricane Insurance Protection-Wind Index.
“That product is what’s called a weather index policy. So it’s a little bit different than your own individual underlying multi-partial policy in that we use weather data, and that doesn’t require that you call your agent, that a Loss Adjuster comes out. We just use that empirical data to then determine if your county has triggered a loss.”
RMA Administrator Marcia Munger adds a tropical storm option was expanded into this coverage later on. Regarding this form of hurricane insurance protection in the case of Hurricane Helene…
“With HIP-WI we have had several states trigger in many, many counties across the southeast.”
With indemnities of over $233 million to be paid to those suffering hurricane related losses in six states affected by Helene. In addition, the storm severity has led RMA to work with approved insurance providers.
“In coming up with what’s called emergency loss procedures so that we can simplify, reduce the stress, hopefully, on producers by giving them additional time to report any losses, and for companies to bring in outside help in those areas that have heavy losses.“
The goal for RMA with the HIP-WI indemnities was to get funding to eligible impacted policy holders sooner than later to assist with their post to lead recovery efforts. The challenge, however, was hurricane related. Weather data used to write policy with approved insurance providers originates from the National Oceanic and Atmospheric Administration Center in Asheville, North Carolina.
“When Asheville was taken out, we then went back to the policy provisions to see if there was anything in those provisions that would allow us to possibly deviate from using NOAA data.”
The administrator says the provision allows for an alternative data source, actuarially sound. In this case, NOAA agreed that RMA could use National Hurricane Center data for HIP-WI payments.
“So then we used that data to determine what counties triggered so that producers could get money sooner than later.”