Final Agency Determination: FAD-79
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Subject: By request dated August 9, 2007, the Risk Management Agency was asked for an
interpretation for the 2007 crop year and succeeding crop years of section 10(c)(3) of the Nursery Crop Insurance
Provisions, published at 7 C.F.R. 457.162, and the Nursery Special Provisions statements regarding
cold damage. This request is pursuant to 7 C.F.R. part 400 Subpart X.
Section 10(a)(1) and 10(c)(3) of the Nursery Crop Insurance Provisions states:
10. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic Provisions, insurance is provided for unavoidable damage caused
only by the following causes of loss that occur within the insurance period:
(1) Adverse weather conditions, except as specified in section 10(c) or the Special Provisions;
(c) In addition to the causes of loss excluded in section 12(a) and (c)
through (f) of the Basic Provisions, we do not insure against any loss caused by:
(3) Cold temperatures, if cold protection is required in the Eligible Plant List, unless
(i) You have installed adequate cold protection equipment or facilities and there is a failure or breakdown of the cold protection equipment or facilities resulting from an insurable cause of loss specified in section 10(a) (the insured plants must be damaged by cold temperatures and the damage must occur within 72 hours of the failure of such equipment or facilities unless we establish that repair or replacement was not possible between the time of
failure or breakdown and the time the damaging temperatures occurred); or...
(ii) The lowest temperature or its duration exceeded the ability of the required cold protection equipment to keep the insured plants from sustaining cold damage;
The Nursery Special Provisions statements read as follows:
Scientific name: All cultivars of Ficus benjamina*, Fiscus
retusa*, and Hibiscus rosa-sinensis*, and all species and cultivars for Ixora*
*Leaf drop on this crop without death of the twigs, branches or stems is considered a normal response to cold and will not be considered as basis for a claim.
Death of twigs, branches or stems is minimally required as a basis for claim.
The requestor interprets the above-quoted provisions to mean the Nursery Crop Insurance Provisions affords coverage
to plants damaged by adverse weather occurrences, if they meet the minimum requirements set forth in the Eligible Plant
List and Plant Price Schedule (EPL/PPS) for that specific year. The Nursery Crop Insurance Provisions includes coverage
for all cold weather events. All plants are covered for abnormal leaf drop from cold damage, which is an insured peril
under the Nursery Crop Insurance Provisions, excluding the cultivars of Ficus benjamina,
Fiscus retusa, Hibiscus rosa-sinensis, and all species and cultivars for Ixora.
Therefore, any crop not specified in the Nursery Special Provision statements has coverage for cold damage under
this policy, if the insured suffers a loss of market value due to leaf drop that is abnormal and beyond the insured’s
control. Both practices (field grown
and container) and all plant type codes are covered for weather-caused leaf drop.
Final Agency Determination
The Federal Crop Insurance Corporation (FCIC) agrees in part with the interpretation submitted.
Damage to the plant as a result of cold weather is an insurable cause of loss unless limited by section 10(c)
of the Nursery Crop Provisions or the Nursery Special Provisions. There are two relevant exclusions regarding
coverage for cold temperatures. The Nursery Crop Provisions exclude coverage for cold temperatures if cold protection
is required unless the cold protection was adequate but there was a failure or breakdown of the protection as a result
of an insurable cause of loss or the temperatures
were such that the cold protection measures could not protect the plants.
The Nursery Special Provisions exclude cold temperatures as an insured cause of loss for cultivars of Ficus
benjamina, Fiscus retusa, Hibiscus rosa-sinensis, and all species and cultivars for Ixora unless there is death
of twigs, branches or stems in addition to the dropped leaves. This is because these are broadleaf evergreen
and foliage plants that would normally maintain their leaves all year round but routinely experience some leaf
drop from their canopy in response to cold temperatures that would be normal to the area. Therefore, cold temperatures
that only cause simple leaf drop for these plants is not, in and of itself, an insurable cause of loss.
While the Nursery Special Provisions expressly contains the limitation for cultivars of Ficus benjamina,
Fiscus retusa, Hibiscus rosa-sinensis, and all species and cultivars for Ixora, there are other plants that would
not be covered for cold temperatures as an insured cause of loss if leaf drop occurred without the death of twigs,
branches or stems. For example, cold temperatures that only cause leaf drop in deciduous trees would not be an
insured cause of loss, without some other damage such as the death of twigs, branches and stems, because such trees
annually lose their leaves under normal weather conditions.
In accordance with the 7 C.F.R. 400.765(c), this constitutes the final agency determination and is binding on
all participants in the Federal crop insurance program for the 2007 crop year.
Date of Issue: October 4, 2007