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Quality Loss (QL) Option

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Quality Loss Option Crop Insurance

Quality Loss (QL) Option

If you have not already read, the articles on Yield Adjustment, Yield Cup, and Yield Exclusion you may want to go back and check those out first.  We also have Podcast episodes about each of those subjects as well – Podcast Link.

Here is a brief summary of what the Quality Loss (QL) option is all about from our friends over at Rain & Hail:

Quality Loss (QL) option allows you to utilize your actual yields without adjustments for quality deficiencies to calculate your Approved APH, rather than the post-quality yields that are currently used. By electing QL, your APH database will reflect what you actually produced, not a yield that was reduced due to a quality issue. Replacement only applies when a Notice of Loss (NOL) was timely filed and the crop had quality-adjusted production, regardless of whether an indemnity payment occurred.

Currently the Quality Loss (QL) option, at the time of publishing this article, is only available for 15 crops.

 

How the Quality Loss (QL) Option works.

The Quality Loss (QL) option allows you, when applicable, to use your pre-quality adjusted production when factoring your Approved Yield.

What does “when applicable” mean then?

  • Must have added the Quality Loss (QL) option by the appropriate sales closing deadline. 
  • Must have filed a timely Notice of Loss in the crop year you wish to use the Quality Loss (QL) option.
  • Must have had a Quality Adjustment aka reported Pre-Quality Adjustment production and Post-Quality Adjustment production in your APH database.
  • Can only use one of the following options: Quality Loss (QL), Yield Adjustment (YA), or Yield Exclusion (YE).
    • note – most AIP’s software will help you with that decision.

The Quality Loss (QL) option must be elected by the Sales Closing date. When elected, the Quality Loss (QL) option will replace post-quality adjusted (QA) production with the pre-QA production for any year the insured filed a timely Notice of Loss.

Example

 

As you can see in the above example; If you did NOT have the Quality Loss (QL) Option you would have to use the average of your Post-Quality Adjusted Production which was 46.0 bushels per acre.  If you had the Quality Loss (QL) Option you could then use the average of your Pre-Quality Adjusted Production which is 57.5 bushels per acre.

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Disclaimer

There are a lot of rules behind this program, so the above information is very high level.  You will want to take a deeper dive into understanding the program before making a purchasing decision.  Keep in mind the above information is for informational purposes only, and does not replace anything found in the Crop Insurance Handbook, Loss Adjustment Manual, RMA’s website, etc.  Always consult the Crop Insurance Handbook, Loss Adjustment Manual, RMA’s website, etc. before making a purchasing decision.  Any discrepancy between the above information and the policy is not intended.  The information provided in this article does not supersede policy and procedure.  Any changes to the policy and procedures may make this material obsolete.

 

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