What is the Supplemental Coverage Option?
The Supplemental Coverage Option (SCO) is a county-level revenue-based or yield-based optional crop insurance endorsement that provides additional coverage for a portion of your underlying crop insurance policy deductible.
SCO can be elected only when a producer has purchased one of the following underlying plans of crop insurance:
- Yield Protection
- Revenue Protection
- Revenue Protection with the Harvest Price Exclusion
- or to the Actual Production History policy for crops that don’t have revenue protection available.
The Federal Government pays 65 percent of the premium cost for SCO.
How Do I Buy SCO?
Producers can choose SCO as an endorsement to the underlying policy. This choice must be made by the sales closing date for your underlying policy, and it needs to be with the same insurance company. Any crop on a farm that has been elected to participate in the Agriculture Risk Coverage (ARC) program at Farm Service Agency (FSA) is not eligible for SCO coverage.
Contact your trusted ProAg agent today to discuss policy details and availability.
How Does SCO Work?
SCO follows the coverage of the underlying policy. If Yield Protection is chosen, then SCO covers yield loss. If Revenue Protection is chosen, then SCO covers revenue loss.
The amount of SCO coverage depends on the liability, coverage level and approved yield for the underlying policy. However, SCO differs from the underlying policy in how a loss payment is triggered. The underlying policy pays a loss on an individual basis and an indemnity is triggered when there is an individual loss in yield or revenue. SCO pays a loss on an area basis, and an indemnity is triggered when there is a county-level loss in yield or revenue.
SCO crop insurance indemnity payments are determined by county average revenue or yield, and are not affected by whether you receive a payment from your underlying crop insurance policy. It is possible to experience an individual loss but to not receive an SCO payment, or vice-versa.
The dollar amount of SCO coverage is based on the percent of crop value covered. SCO also allows producers to customize their amount of coverage with a coverage percentage. The coverage percentage is elected from a range of 50 percent to 100 percent, and the maximum amount of SCO coverage is multiplied by that percentage.
What Happens if I Elect SCO and Signed Up for ARC?
If a producer elects SCO and ARC for the same crop on their farm, SCO coverage for that crop on that farm will be cancelled and the producer must report the crop on that farm covered by ARC on their acreage report. If they do not report a farm covered by ARC, the acreage of that farm will be ineligible for an SCO payment. On top of the ineligibility, the producer will still owe 60 percent of their SCO premium on that crop and farm to cover administrative expenses. The underlying policy will remain in effect.
Still Have Questions?
Interested in covering your MPCI deductible? Check out ECO + AIM
Not all coverage or products may be available in all jurisdictions. The description of coverage in these pages is for informational purposes only. Actual coverage will vary based on the terms and conditions of the policy issued. The information described herein does not amend, or otherwise affect, the terms and conditions of any insurance policy issued by any of ProAg’s affiliated insurance companies.