Federal crop insurance coverage is an odd animal for many property insurance coverage professionals. It seems to be like insurance coverage, smells like insurance coverage, and is offered by personal insurers, however it’s not ruled by state insurance coverage regulation. It’s a federal program, created by statute, administered by a federal company, and in the end judged below administrative regulation ideas quite than conventional insurance coverage protection doctrines. A latest Fifth Circuit choice, Derick Miller v. Federal Crop Insurance coverage Company, 1 gives a lesson in how that distinction can decide the end result of a declare.
To grasp the case, you must begin with how the federal crop insurance coverage program works. Congress created the Federal Crop Insurance coverage Act to stabilize agriculture by defending farmers from unavoidable losses brought on by climate and different pure occasions. The federal government doesn’t promote insurance policies instantly. As a substitute, it licenses personal insurance coverage firms to concern standardized insurance policies which might be written and reinsured by the federal authorities by the Federal Crop Insurance coverage Company and administered by the USDA’s Danger Administration Company.
These insurance policies insure in opposition to sure named causes of loss, equivalent to drought, extra rainfall, wind, hail, and warmth. However there’s a important exclusion baked into the statute and the coverage. Losses brought on by a failure to observe “good farming practices” are usually not coated. Good farming practices are outlined as manufacturing strategies typically acknowledged by agricultural consultants for the world. In different phrases, this system doesn’t insure poor farming choices.
That sounds easy sufficient till you see the way it performs out in follow.
Derick Miller is a Texas farmer who insured his cotton and peanut crops for the 2021 crop 12 months. That 12 months was a tough one in West Texas. Based on Miller, the world skilled drought, extreme rain, excessive winds, and warmth. Many farmers in his counties acquired crop insurance coverage funds for weather-related losses. Miller reported losses as properly, pointing specifically to wind injury and climate impacts that interfered with irrigation and weed management.
His declare was denied. Not as a result of the insurer stated the climate didn’t happen, however as a result of the Danger Administration Company decided that Miller had not adopted good farming practices. The company concluded that his peanut and cotton losses have been primarily the results of administration failures, not insured climate occasions. These alleged failures included insufficient weed management, inadequate irrigation at important instances, a peanut seeding charge beneath beneficial ranges, and crop rotation practices inconsistent with Texas peanut manufacturing steerage.
Miller challenged that willpower. His argument will sound acquainted to anybody who handles property insurance coverage disputes. He stated he did what affordable farmers in his space do. He pointed to county extension brokers and an agronomist who supported his practices. He relied on rising season inspection experiences displaying that his crops have been similar to these of others within the space. He additional argued that even when there have been issues with irrigation or weed management, these issues have been brought on by insured climate occasions, equivalent to excessive winds flipping irrigation pivots and extreme rain that delayed herbicide purposes.
The district courtroom rejected his arguments, and the Fifth Circuit affirmed. The appellate courtroom’s opinion made clear that this case was not about whether or not it agreed with Miller’s farming choices and even whether or not it may need weighed the proof in another way. The one query was whether or not the USDA’s choice was arbitrary or capricious below the Administrative Process Act. That could be a extremely deferential commonplace.
The courtroom walked by the company’s reasoning and located sufficient within the file to uphold it. The Danger Administration Company didn’t ignore Miller’s proof. It acknowledged the opinions of his consultants and the rising season inspections. But it surely defined why it discovered different proof extra persuasive, together with photographic and observational proof of weed infestation, revealed Texas agricultural steerage on seeding charges and rotation, and analyses of rainfall and irrigation suggesting that water was not utilized when and the way the crop wanted it.
Importantly, the courtroom emphasised that Miller didn’t present that the company fabricated proof or relied on plainly faulty knowledge. He basically argued that his consultants ought to have been believed over the company’s consultants. Underneath administrative regulation, that’s normally a dropping argument. Companies are allowed to decide on between competing skilled opinions so long as they clarify their selection.
The courtroom additionally downplayed the rising season inspection experiences that Miller relied on. These experiences have been restricted in scope, internally blended, and didn’t clearly help the conclusion that the crops have been more likely to meet their manufacturing ensures. They weren’t sufficient to override the company’s later, extra detailed good farming practices willpower. The Fifth Circuit concluded that the company articulated a rational connection between the details it discovered and the choice it made.
There are a number of vital classes on this choice, particularly for policyholders who insure below the federal crop program and for claims professionals coping with crop claims. First, this isn’t state-law insurance coverage. Conventional doctrines like construing ambiguities in favor of protection or giving particular weight to the policyholder’s affordable expectations don’t apply. As soon as a dispute reaches federal courtroom, it’s filtered by administrative regulation, the place deference to the company is the rule, not the exception.
Second, good farming practices determinations are sometimes the true protection battleground. If an company concludes that losses are primarily resulting from administration choices quite than climate, protection can disappear even in a 12 months when the climate was objectively dangerous. The query turns into not whether or not climate occurred, however whether or not it was essentially the most limiting issue in comparison with farming practices.
Third, the executive file is all the things. By the point a case will get to courtroom, no new proof is coming in. Farmers, their advisors, and public adjusters within the area should construct an in depth, contemporaneous file throughout the rising season and declare course of. Logs of planting charges, irrigation schedules, gear failures, restore delays, climate occasions, pictures, and native skilled enter matter excess of after-the-fact explanations.
Fourth, skilled opinions should be particular, native, and evidence-driven. Credentials alone are usually not sufficient. Specialists should instantly interact with the information the company depends on, clarify why native situations justify deviations from common steerage, and doc how insured climate occasions interfered with in any other case affordable practices.
On occasion, I get a name from a public adjuster asking a few crop declare. From my authorized perspective, I stress the necessity for vigilance, documentation, and early advocacy when coping with federal crop insurance coverage claims. You can’t present the proof later if a denial takes place. This choice doesn’t imply farmers can’t win disputes over good farming practices. On this program, profitable protection typically relies upon much less on what in the end occurred to the crop and extra on how properly the story of farming practices, climate, and causation is documented earlier than the company ever makes its name.
Thought For The Day
“In issues of conscience, the regulation of the bulk has no place.”
—Mahatma Gandhi
1 Miller v. Federal Crop Ins. Corp., No. 24-10929, 2026 WL 64291 (5TH Cir. Jan. 8, 2026). (See additionally, Appellee’s Temporary and Appellant’s Reply Temporary).