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PLNA e-News: Business Resources

Nursery Crop Insurance - New Concept

Friday, September 1, 2017   (0 Comments)
Posted by: Cathy Corrigan
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Most consider the nursery crop insurance program to be challenging and burdensome, with much of the burden recurring year after year regardless of whether you have a claim. There is an effort underway to change that.

The Risk Management Agency of the United States Department of Agriculture recently awarded a contract to conduct research to obtain information for a proposed new alternative nursery insurance program referred to as Nursery Value Select (NVS), and identify issues related to the proposed program. Watts and Associates, Inc. (W&A), a private economic consulting firm based in Billings, Montana, was contracted to conduct a targeted study to evaluate the efficacy of the new concept and gather stakeholder input regarding its appropriateness. W&A has completed nearly 100 contracts focused on crop insurance over the last 16 years.

As part of the required gathering of stakeholder input, W&A hosted a teleconference listening session on July 26, 2017. The meeting focused on gathering input from Nursery operators as well as from Nursery industry stakeholders (Crop Insurance agents, insurance company representatives, association representatives, extension specialists, etc.) on the concepts of the new program.

Some of the highlights of the proposed program are:

Inventory Requirements

Current System – Plant Inventory Value Report required at application and must be entered into DataScapes software
Proposed System – Remove DataScapes software and at application the operation estimates a 12 month plan of inventory value for each plant type

Plant Prices

Current System – Plant prices are regionally based
Proposed System – Plant prices are based on operations sales records or a percent of catalog price

Loss Adjustment

Current System – requires two inventories in addition to the Plant Inventory Value Report
Proposed System – requires two inventories at the time of loss

Concept Overview

 Under Nursery Value Select (NVS) an insured nursery operation would:

– Provide an expected monthly inventory value for each plant “type”
– Select a Coverage Level
– Select a basic unit structure (basic unit or optional units including field grown or container grown) and value based on the estimated monthly inventory schedule.
– Submit a Nursery Catalog to their agent who will pass it on to their Approved Insurance Provider (AIP)


Under NVS an Approved Insurance Provider (AIP) through their agents would determine:

– The suitability of the insured’s monthly inventory plan (i.e., look for unusual or unexpected patterns)
– The fairness of catalog prices (i.e., look for deviations from industry prices)
– The insurability of plants proposed for insurance (i.e., look for plants grown in unusual locations or by unusual practices as well as plants not grown by the insured historically)


In the Event of a Loss

The Nursery Operation

– Provides sales price data for a pre-determined time frame whose length may be determined based on input at these listening sessions for plants by size in the nursery immediately prior to the loss; and
– Provides the insurance provider a plant inventory from immediately prior to the loss by species, variety, and size;
– Allows insurance provider to inspect the nursery to examine the undamaged inventory as well as damaged plants following the loss.

The Approved Insurance Provider

– Inspects the damaged crop(s)
– Uses average sales prices from Nursery Operator sales records (or a percent of the Catalog price) to determine the pre-loss inventory value and the Value of the Damaged crop
– Calculates the indemnity value based on the policy structure; and
– Pays the insured.


A copy of the complete Power Point presentation from the listening session is available by clicking here.
Watts & Associates, Inc. welcomes any comments/questions from all nursery industry stakeholders. Contact Dr. Alan Baquet at W&A by email at abaquet@Wattsandassociates.com.

PLNA will monitor the progress on this new insurance program and updates will be posted in future e-News.


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