What is it?
Enhanced Coverage Options is an endorsement that provides insurance coverage to the top end of county revenue losses between 86% to 90/95%.
How Does it Fit in With Other Policies?
Crop Insurance can be thought of in tiers. The base tier is the Multiple Peril Crop Insurance (MPCI). This tier has the choice of coverages such as Revenue Protection and Yield Protection. The next tier will cover up where the MPCI coverage ends up to 86% of losses. Currently, Supplemental Coverage Option (SCO) and Agricultural Risk Coverage (ARC) align with the second tier.
Before the 2021 planting season, there was a gap (Deductible) from above 86% of losses putting the full risk on the grower. Enhanced Coverage Option covers the 86% to either 90% or 95% of county revenue, depending on which level of coverage the grower wants to select.
When Will There Be a Loss?
There is a large difference how ECO and MPCI are triggered for payment. The MPCI coverage is based on the individual grower’s operation while ECO is county-based. For ECO, if the expected revenue is reduced below the elected level (90 or 95%), the grower will receive an indemnity payment. This can be separate from the individual grower’s yield or revenue which triggers the MPCI policy.
Can You Buy Just This Policy?
ECO is an endorsement to another policy meaning the grower must have already selected an MPCI option such as Yield Protection or Revenue Protection. It is also distinct and not affected by Farm Programs through the Farm Service Agency (FSA). These programs include Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC). ECO can be combined with these programs.
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our analysis of ECO