ECO is an exciting new crop insurance product - an enhanced version of SCO with no level requirements and coverage for more than 30 different crops!The Enhanced Coverage Option (ECO) provides area-based coverage for a portion of the deductible of your underlying policy, up to 95%. ECO is an optional endorsement to supplement your underlying policy including RP, RP-HPE, YP, YDO, and APH.
How Does It Work?
Coverage is available for 31 spring-planted crops with a contract change date of November 30, 2020 or later.
- 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
Can be added to an individual
or area underlying plan
ARC or PLC participation
has no impact on eligibility
|Choose a coverage band option:
86% to 95% (9% coverage band)
86% to 90% (4% coverage band)
|Choose a Coverage Percentage |
of 50% - 100%,
in 1% increments
|Calculate amount of ECO coverage
Liability of underlying policy/Coverage level of underlying policy x ECO coverage band x Selected coverage percentage
COVERAGE and PREMIUM CALCULATIONS
|Area Expected Yield: 200 bu/ac||Corn Projected Price: $4.00/bu|
|Elected ECO Coverage: 95%||Producer's Approved APH: 210 bu/ac|
|Coverage Range: 9% (95%-86%)||Premium rate: 45%|
|$4.00 x 210 bu/ac x 9% = $75.60/ac ECO Amount of Insurance|
|$75.60/ac x 0.45 = ~$34.00/ac Total Premium|
|$34.00/ac x 0.44 = ~$15.00/ac Premium Subsidy|
|$34.00/ac - $15.00/ac = $19.00/ac Producer Premium|
|Harvest Price: $3.80/bu||Final Area Yield: 190 bu/ac|
|Final Area Revenue: $722/ac||Producer's Approved APH: 210 bu/ac|
|95%-[$722 / $800] = 4.75% Loss Percentage|
|4.75%/9% = 52.78% Payment Factor|
|$75.60/ac x 52.78% = $39.90/ac ECO indemnity|
* This sample is for example purposes only. Contact an FMH agent for full details.