Freezing temperatures that destroyed a wide swath of crops in California are expected to bring in a flood of claims, according to California regulators. With a $1 billion agricultural damage estimate, officials said citrus growers alone will likely file 3,000 claims. Strawberry and avocado farmers are also likely to seek payouts, said Commissioner Steve Poizner, who earlier this week declared an insurance emergency to allow out-of-state adjusters to help process claims quickly.
About 90 percent of California crops are covered by some kind of crop insurance, and growers insure their crop for about 65 to 70 percent of its value, on average, industry officials said. Many of those policies are backed by federal subsidies that help cover the cost of farmers’ premiums and reimburse them for a portion of their losses.
The first group of out-of-state adjusters is scheduled to arrive in California on Friday, helping speed aid to those who paid to protect their fields and orchards from such disasters, Poizner said.
Last week alone, the Fresno-based Rain and Hail Insurance Service Inc. received more than 500 claims alleging freeze damage from farmers across the San Joaquin Valley. With just 20 contract adjusters trained to check lemon and orange trees for damage, company officials said they would welcome extra manpower from citrus-growing states like Florida and Texas.
“It will allow us to better service the clients,” said Ed Gribben, claims and quality control manager for Rain and Hail, which handles claims for Agri General Insurance Co., State Farm. “If they’re from Florida, they know citrus.”
Crop insurance adjusters are specially trained to spot damage to fruits and vegetables under a program run by the U.S. Department of Agriculture.
In a given orange grove, an adjuster might select five or 10 trees in one acre, and pick no fewer than 100 individual fruit from each tree, said Tony Cignarale, chief of the state Insurance Department’s Consumer Services Division.
Then, they cut each orange in half and look for segments pulling away from the peel, a telltale sign of freeze damage. In time, damaged fruit’s insides will turn to mush and dry up inside.
State guidelines say if just 20 percent of the fruit is damaged, it’s considered a total loss and qualifies for insurance coverage.
Several growers said they felt better prepared to recoup their losses from this year’s freeze. A 1998 cold snap caught many without insurance and ended up costing growers more than $500 million.
Nick Hill, who grows 800 acres of citrus in Fresno and Tulare counties, was able to salvage about one-third of his tangelos to sell as fresh fruit in 1998. He said he was hopeful he’d bounce back even more quickly this time.
“My lemons are gone, the oranges don’t look so good, and the Minneolas, I just don’t know,” Hill said. “It’s bad, it’s probably really bad. But that’s why we buy insurance so we can come back next year.”