Enhanced Coverage Option

What is the Enhanced Coverage Option?

The Enhanced Coverage Option (ECO) is a multiple peril crop insurance (MPCI) option that provides
area-based coverage for a portion of your underlying policy’s deductible in a manner similar to the Supplemental Coverage Option (SCO). It uses the same expected and final area yields, projected and harvest prices, and payment factors as SCO, but covers a band from 86 percent (where SCO coverage triggers) up to 90% or 95% of expected crop value. Like SCO, ECO is based on your underlying policy plan of insurance.

What is required to purchase ECO?

ECO must be purchased as an endorsement to the Yield Protection, Revenue Protection, Revenue Protection with the Harvest Price Exclusion, Actual Production History or Yield Based Dollar Amount of Insurance policy.

How does ECO work?

ECO follows the coverage of your underlying policy. If you choose Yield Protection, then ECO covers yield loss. If you choose Revenue Protection, then ECO covers revenue loss.

The amount of ECO protection depends on the expected crop value, which is based on the liability and coverage level for your underlying policy. However, ECO differs from the underlying policy in how a loss payment is triggered. The underlying policy pays a loss on an individual unit basis and an indemnity is triggered when you have an individual loss in yield or revenue. ECO pays a loss on an area basis (generally county), and an indemnity is triggered when there is an area-level loss in yield or revenue.

When is a payment triggered under ECO?

ECO begins to pay an indemnity when the county average yield or revenue falls below 90% or 95% of the expected level depending on which ECO trigger you select. The full amount of the ECO coverage is paid when the county revenue or yield falls to 86% of expected county revenue or yield.

Do I need a loss on my underlying policy to receive an ECO payment?

ECO payments are determined only by county average revenue or yield and are not affected by whether you receive a payment from your underlying policy. It is possible to experience an individual loss but not receive an ECO payment, or vice-versa.

How much does ECO cost?

The exact premium cost depends on the crop, county, type of coverage you choose (such as Yield Protection or Revenue Protection), the price discovered for your commodity, the volatility of the market in the last five days of the projected price discovery period (for revenue-based plans), and the trigger level of 90 or 95 percent. 

The Federal Government pays a 65% subsidy for ECO premium. Premium rates are generally released in November of each year for spring crops. As a general rule of thumb, the premiums for ECO will be similar to other area plans sold at the same coverage levels in your county. Talk to your agent or AgriSompo representative for more information.

What happens if I select ECO & also sign up for ARC?

Your choice of ARC has no impact on your eligibility for ECO. If you elect ECO and ARC for the same crop on a farm, your ECO coverage for that crop on that farm will be unaffected.

Can I purchase ECO with an Area-Based Plan of Insurance?

No. Farmers who buy ECO may not buy Area Risk Protection Insurance (ARPI), Stacked Income Protection Policy (STAX), Hurricane Insurance Protection – Wind Index Endorsement (HIP-WI), or Margin Protection (MP) on the same acreage in the same year. Producers may choose to purchase SCO on acres that are insured under ECO, but are not required to do so. ECO and SCO are not mutually exclusive because their bands of coverage do not overlap.