Enhanced Coverage Option

Product Brochure

Listen to Episode 1 of FMH InsureCast to learn more about ECO

The Enhanced Coverage Option (ECO) provides area-based coverage for a portion of the deductible of your underlying policy,
similar to the Supplemental Coverage Option (SCO), but at a higher coverage level.
ECO is an optional endorsement to supplement your underlying policy (RP, RP-HPE, YP, YDO, and APH).

How Does it Work?

  • ECO provides area-based coverage for a portion of the deductible of your underlying policy, similar to the Supplemental Coverage Option (SCO).
  • ECO is based on your underlying policy plan of insurance. For example, with Yield Protection ECO covers yield loss.
  • The amount of ECO coverage depends on the liability, coverage level, and approved yield for your underlying policy.
  • Coverage must be elected by the sales closing date for your underlying policy.

 

What Are the Benefits?

  • Coverage up to 95% of expected crop value
  • Kicks in where SCO coverage stops
  • Uses same SCO figures for expected and final area yields, projected and harvest prices, and payment factors
  • No premium credits or offsets against individual policy
  • ARC or PLC participation has no impact on eligibility

DOWNLOADS & RESOURCES

Product Brochure View coverage information, guidelines, and details.

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InsureCast Podcast Listen to Episode 1 of FMH InsureCast to learn more about ECO

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ADDITIONAL INFORMATION

Coverage Options
  1. Choose a coverage band option:
    • 86% to 95% (9% coverage band)
    • 86% to 90% (4% coverage band)
  2. Choose a Coverage Percentage of 50% - 100%, in 1% increments
  3. Calculate amount of ECO coverage
    Liability of underlying policy/Coverage level of underlying policy x ECO coverage band x Selected coverage percentage
Coverage Levels and Premium Subsidies
  • Premium rates are generally released in November of each year for spring crops
  • Includes separate administrative fee
  • Billing dates match underlying policy billing dates
  • Subsidy amounts: 51% for YP, 44% for RP
Sample Estimate of ECO Cost for Corn
REVENUE PROTECTION
Coverage
Band
Amount of
Coverage*
Total
Premium**
Producer
Premium
86%-90%$27.15$9.96$5.58
86%-95%$61.09$27.80$15.57

YIELD PROTECTION
Coverage
Band
Amount of
Coverage*
Total
Premium**
Producer
Premium
86%-90%$27.15$6.32$3.11
86%-95%$61.09$18.90$9.26
* This is based on a yield of 177.7 bushels/acre with an expected price of $3.82.
** This is intended to give a general indication of potential cost of ECO. Actual cost will vary based on actual yields, actual prices, implied market volatilities, and other factors.
Availability 
ECO is available in all states within the FMH writing area. Coverage is available for spring-planted crops with a contract change date of November 30, 2020 or later.

Covered crops include: Barley, Buckwheat, Burley Tobacco, Canola, Cigar Binder Tobacco, Corn, Cotton, Cotton - Ex. Long Staple, Cultivated Wild Rice, Dark Air Tobacco, Dry Beans, Dry Peas, Fire Cured Tobacco, Flax, Flue Cured Tobacco, Grain Sorghum, Hybrid Corn Seed, Hybrid Seed Rice, Hybrid Sorghum Seed, Millet, Oats, Peanuts, Popcorn, Rice, Safflower, Sesame, Silage Sorghum, Soybeans, Sugar Beets, Sunflowers, and Wheat.

For the 2022 crop year, additional fall-planted crops will be eligible for ECO.

 

Loss Requirements and Triggers

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 (generally county) basis and an indemnity is triggered when there is an area-level loss in yield or revenue.

ECO payments are determined 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.

Indemnity 
Indemnities are determined after RMA provides Final Yields/Revenues, which is a similar process to SCO, MP, and ARPI. An ECO indemnity is not affected by whether you receive a payment on your underlying policy.