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Several hundred Nebraska farmers lose hail coverage

A small number of Nebraska farmers are finding out their crop production hail insurance has been canceled right in the middle of planting season.

Nebraska Department of Insurance Director Bruce Ramge said about 400 farmers were affected by the cancellation of the insurance policies by Crop Pro Insurance, which is a Des Moines-area startup company.

Crop production hail insurance is a supplemental product farmers buy to cover gaps in their federally subsidized multiperil crop insurance policies.

The crop production hail policies pay for actual crop losses caused by hail or wind damage that aren't covered by the multi-peril policies.

Seward County farmer James Duffek was one of the people affected.

Duffek said his cancellation notice mentioned that the company had sold too many insurance policies.

He said his insurance agent told him not to worry about it and that the situation would work itself out, but Duffek, who just finished planting, said it would be bad if a storm damaged his crops and he found out he had no coverage.

"I think it's pretty irresponsible," he said of the cancellations.

Ramge said it was his understanding that Crop Pro could not get reinsurance for all the policies it sold. Without reinsurance, which transfers some of the risk to another insurer, the company would be on the hook for 100 percent of any losses.

He said the Department of Insurance was reviewing the situation, and in the meantime, farmers affected by the cancellations should work with their insurance agents to find new coverage.

Crop Pro officials could not be reached for comment.

The company announced its launch last August with an $8 million venture capital investment.

At the time, co-founder Billy Rose said the company's goal was to serve the traditional crop insurance market while also helping the agriculture industry accelerate the adoption of emerging technologies.


Business
AP
Homeowners wonder if they're covered for volcanoes

HONOLULU — Patricia Deter moved from Oregon to Hawaii to be closer to her two daughters, but the Kilauea volcano burned down her home only a month after she bought it.

Now Deter and others who have recently lost homes to the lava-spewing mountain are on an urgent quest for answers about insurance, desperate to learn whether their coverage will offer any help after molten rock wiped out most of what they owned.

The eruption has destroyed about two dozen homes in the Leilani Estates subdivision on the Big Island.

On Monday, a new fissure spewing lava and toxic gas opened and a crack in the ground that emerged a day earlier sent molten rock crawling toward the ocean, officials said. Nearly 20 fissures have opened since the Kilauea volcano started erupting 12 days ago, and officials warn it may soon have a steam eruption that would shoot boulders and ash miles into the sky.

Few insurance companies will issue policies for homes in Leilani Estates because it is in an area deemed by the U.S. Geological Survey to have a high risk of lava.

But homeowners are not without options. One possibility is the Hawaii Property Insurance Association, a nonprofit collection of insurance companies created by state lawmakers in 1991 to provide basic property insurance for people who are unable to buy coverage in the private market.

The horror of seeing houses turned to ash has motivated some people who had no insurance to scramble to purchase a policy. The association announced last week that it would issue policies to uninsured homeowners in the affected area — but they will have to wait six months.

Some homeowners believe fire coverage will suffice for homes burned by fire from the lava. And a list of frequently asked questions from the Hawaii Insurance Division supports that idea, saying that lava damage may be covered "as a fire peril."

However, there are exceptions. If policies specifically exclude lava damage, the fire coverage will not apply, said Judy Moa, an insurance broker who specializes in catastrophic coverage for Hawaii.

"The cause of damage is lava at the end of the day," she said. "If lava came down the hill, and they have lava exclusion and trees catch fire, which burn the house, that's not covered."

Some homeowners forgo policies that include lava coverage because they can cost more than $3,000 per year, said Moa, who has fielded many calls from anxious homeowners.

The same insurance questions haunt people whose homes are standing but could still be torched by future lava flows.

Todd Corrigan and his wife left their Leilani Estates home on May 4 after a magnitude-6.9 earthquake knocked belongings off their shelves. That jolt convinced them it was time to evacuate.

Corrigan said the most stressful part of the experience might be the uncertainty about what insurance will cover. His policy will pay for damage from a fire but not from lava. His insurer also cautioned him that it will not cover damage if he has not been at home for 30 days. That requirement could be a problem if he is gone for a long time.

"You have to worry about that stress when you're trying to deal with everything else," Corrigan said.

Coverage details vary depending on policies and companies, said Insurance Division Commissioner Gordon Ito, who encouraged homeowners to contact agents to find out what is covered.

State Farm stopped writing policies for homes in the two highest-risk lava zones in the 1990s, but the company grandfathered-in any existing policies, said Kim Silva, a State Farm sales executive in Hawaii.

The company's policies cover fire from volcanic activity, she said, "but every claim has to be handled on its own merit."

Deter's daughters live in the same area as their 88-year-old mother. They know the eruption risks, so they made sure their mother's home was covered by a policy that included lava.

The family's Hawaii-based insurance agent assured daughter Vickie Pruitt that her mother's house was fully covered for lava.

But a phone call from an adjuster on the U.S. mainland told them it looked like the damage was from an earthquake — not the lava — and that the home would not be covered.

"I'm like, 'What?'" Pruitt said. "I'm laughing hysterically. But it's not funny. It's tragic."

They were waiting for a follow-up call they hoped would provide more clarity.


Local
Lincoln grain prices Tuesday

Range of cash grain prices paid to farmers by country elevators in the Lincoln area as of 4 p.m. Tuesday:

Wheat No. 2: 3.61

Corn No. 2: 3.52

Milo: 3.24

Soybeans: 9.84


State
AP
Buffett's company doubles investment in drugmaker Teva

OMAHA, Neb. — Investor Warren Buffett's company more than doubled its stake in Israeli drugmaker Teva Pharmaceuticals in the first quarter.

Berkshire Hathaway Inc. filed an update on its U.S. stock portfolio with the Securities and Exchange Commission on Tuesday.

Berkshire said it held 40.5 million Teva shares at the end of March. That's up from the 18.9 million shares of the world's largest generic drugmaker that Berkshire held at the end 2017.

Berkshire also slashed its holdings in insurance data provider Verisk Analytics to 284,778 shares from 1.56 million shares at the start of the year.

Berkshire officials don't typically comment on these quarterly filings.

Besides investments, Berkshire owns more than 90 subsidiaries in a variety of industries, including insurance, utilities, railroads, and manufacturing.


Local
editor's pick
PSC tells Axtell seed business to halt operations

The Nebraska Public Service Commission on Tuesday issued a cease-and-desist order to an Axtell seed business.

The PSC said in a news release that Roberts Seed Inc. has been operating for more than a year as an unlicensed grain dealer.

The PSC said the business filed an application for a grain dealer license in April 2017 but failed to fulfill the requirements to receive the license. Despite that, the business continued to operate.

The PSC said it has made numerous attempts over the past year to work with the company to complete the application process to get a grain dealer license. Each time, company representatives indicated they would provide information but then failed to provide all of the necessary documentation, the commission said.

Teresa Fisher, the office assistant at Roberts Seed, said the cease-and-desist order covers only the practice of purchasing grain directly from farmers and reselling it as seed. Fisher said the company has no active contracts for that business and essentially has already stopped doing it.

Roberts offers other services including grain cleaning and retail sales of seed from dealers, which are not affected by the order, Fisher said.

She said the company has not been able to produce some of the documents needed to complete the licensing process, such as a 2017 tax return, because they don't exist yet.

"In our defense, what it comes down to is some of the documents they want from us, we don't have yet," Fisher said.

The PSC has scheduled a hearing June 18 at 11 a.m. at the Minden City Hall, at which Roberts Seed will be required to show cause as as to why it should not be assessed civil penalties for operating without a license. It also could face criminal penalties.