SCO & ECO

Have you heard about SCO and ECO for your crop insurance? But get totally lost in the insurance jargon? Join Chelsea Heatherington with Kingsgate Insurance as she dives into the topic further.

Supplemental Coverage Option (SCO)

• What is it?
  • SCO is an area-based coverage which picks up from your MPCI coverage level up to 86%.
  • It may be purchased with the Enhanced Coverage Option (ECO) for coverage up to 95%.
• What are the benefits?
  • This is a county-based coverage, which is especially advantageous for producers with yield history as good or better than the county.
  • If there is a high projected price, use this endorsement to lock in a floor.
  • This program is subsidized by the government at 65%.
• Who is eligible?
  • SCO is an optional endorsement to individual MPCI coverage policies. Eligible policies include Yield Protection, Revenue Protection, or Revenue Protection with the Harvest Price Exclusion. SCO must be purchased with the same Approved Insurance Provider (AIP) as the underlying policy.
  • The producer cannot have SCO and Agriculture Risk Coverage (ARC) on the same field. SCO pays on planted acres and ARC pays on 85% of base acres. Be sure to register for Price Loss Coverage (PLC) instead of ARC at the Farm Service Agency (FSA).
• When can I sign up?
  • The choice to add SCO must be made by the sales closing date for the underlying policy. March 15^th is the deadline for Iowa corn and soybean policies.
• How does it work?
  • The liability (or maximum payout) is based on the expected crop value, the insured’s Actual Production History (APH), for the individual grower. However, indemnity is triggered based on whether the county faced a revenue or yield loss.
  • If you have a Revenue Protection policy, the SCO endorsement would mimic and provide revenue protection on an area-basis. If you have a Yield Protection policy, the SCO endorsement would provide yield protection on an area-basis.
  • RMA determines the final county yield by June following the crop year. Indemnities are paid the summer following the crop year, not at harvest time.

Enhanced Coverage Option (ECO)

• What is it?
  • ECO is an area-based coverage which picks up from your MPCI coverage level. It can be used with SCO beyond 86% up to 90% or 95%.
  • SCO is not required to purchase ECO. Producers can elect to leave a gap in coverage.
• What are the benefits?
  • This coverage can be triggered with only a 5% loss in yield or revenue depending on the underlying MPCI coverage plan.
  • This program is subsidized by the government at 44% for revenue plans and 51% for yield plans.
• Who is eligible?
  • ECO is an endorsement to individual coverage and matches that coverage. Both must be purchased with the same Approved Insurance Provider (AIP).
  • Unlike SCO, ECO is not affected by Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC) Farm Program decisions.
  • ECO is not eligible with Margin Protection (MP) or Area Revenue Protection Insurance (ARPI).
• When can I sign up?
  • The choice to add SCO must be made by the sales closing date for the underlying policy. March 15^th is the deadline for Iowa corn and soybean policies.
• How does it work?
  • The liability (or maximum payout) is based on the expected crop value, the insured’s Actual Production History (APH), for the individual grower. However, indemnity is triggered based on whether the county faced a revenue or yield loss.
  • If you have a Revenue Protection policy, the ECO endorsement would mimic and provide revenue protection on an area-basis. If you have a Yield Protection policy, the ECO endorsement would provide yield protection on an area-basis.
  • RMA determines the final county yield by June following the crop year. Indemnities will be paid the summer following the crop year, not at harvest time.

Reach out to Chelsea Heatherington at Kingsgate Insurance to learn more about the Supplemental Coverage Option (SCO).and/or Enhanced Coverage Option (ECO).