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Changes possible in Mont. hail insurance program after 2013

The chairman of the Montana state hail insurance program says a summer-long battle with hail could lead to changes, including higher premiums and the use of reinsurance.

But Gary Gollehon, a Brady, Mont., farmer, said the program will remain viable and beneficial for producers.

“Hail and drought are our two biggest concerns. We’re in this for the long run,” he said.

The Montana program, the only one of its kind in the nation, provides basic hail insurance coverage on any crop grown in the state. Last year, 2,082 policies were issued, with the hail board covering 1,046 losses totaling more than $14 million — or 186 percent of the premiums, according to information from the state hail board.

That’s the worst loss in the program’s 98-year history, reflecting how much damage hail did to crops in 2013, Gollehon said.

A strong reserve fund helped the program cover 2013 claims, but the five-member hail board decided not to offer refunds. Other board members are Commissioner of Insurance Monica Lindeen, Agriculture Department Director Ron de Yong and producers Trudy Lass Skari and Jim Schillinger.

Typically, producers receive an annual refund of 10 to 50 percent. The refund was 40 percent in 2012 and 25 percent in 2011, said Jayson O’Neill, information specialist with the state ag department.

Receiving refunds makes the program even more attractive to participants, but the record loss ruled out refunds for 2013, Gollehon said.

A date hasn’t been set yet, but hail board members are expected to meet in March to discuss whether premiums will increase in 2014, Gollehon said.

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