Enhanced Coverage Option (ECO)

Overview

The Enhanced Coverage Option (ECO) is a new crop insurance option that provides additional area-based coverage for a portion of your underlying crop insurance policy deductible. It 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. ECO follows the coverage of your underlying policy. If you choose Yield Protection or a yield-based policy, then ECO covers yield loss. If you choose a Revenue Protection policy, then ECO covers revenue losses.

ECO will be available for 31 crops, starting with the 2021 crop year, in most counties where these crops are grown. Additional crops will be added in subsequent years based on producer interest and data availability. Consult the RMA actuarials for availability.

The amount of ECO coverage depends on the liability of 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 basis and an indemnity is triggered when you have an individual loss in yield or revenue.
• ECO pays a loss on an area basis, and an indemnity is triggered when there is a decrease in the county level yield or revenue.

ECO has two trigger levels: 90 and 95 percent. ECO provides a band of coverage between the elected trigger level and 86 percent. If the county yield or revenue is reduced beyond the trigger level, you will receive an ECO indemnity. If the reduction in yield or revenue exceeds the 86 percent threshold, you will receive an indemnity equal to the full insured liability.

To learn more, consult the ECO Fact Sheet.

The System was designed to treat ECO as an option even though the RMA did not issue an option code in the ADM. If available for the Reinsurance Year, State, County, and Crop, the System will display an internal "ECO" option code for selection when adding or editing the underlying/companion coverage, which is required to insure the option. Once elected, the System will use the ECO option code when populating ECO information on forms as well as determining the appropriate ECO premium rating and claim calculations. In order to do this, the System will use the underlying/companion coverage Plan Code and convert it to the appropriate ECO Plan Code when reading the ADM tables for applicable ECO lines. The following crosswalk will be used to determine the conversion when needed:

If the underlying/companion coverage Plan Code is Then the new ECO Plan Code is
"01", "55", "90" "87"
"02" "88"
"03" "89"
• A separate $30 admin fee when ECO is elected has been implemented. When multiple coverages exist for the same crop/county, only one admin fee is charged for ECO.

ECO functions similarly to SCO. As such, you’ll notice the following changes in the System to support the ECO functionality.

• An internal “ECO” option code will display for selection if ECO is available for the selected state/county/crop/base coverage plan code/base coverage level.
• A new field was added for "ECO Area Loss Trigger" to allow the user to indicate if the grower has elected a 90% or 95% Area Loss Trigger.
• A new field was added for "ECO Coverage Percentage" to allow the user to indicate the Coverage Percentage between 50% and 100% that the grower elected. The default will be 100%.

When STAX or ECO are also present on the policy

• The existing Added Land Coverage field was updated to include ECO. This field only display if SCO and/or ECO are elected and a related STAX coverage exists. In this scenario, the System will display radio buttons labeled "SCO" (if SCO and not ECO is elected), "ECO" (if ECO not SCO is elected), "SCO & ECO" (if both SCO and ECO are elected) and "STAX". The purpose of this field is to allow the user to indicate which coverage, SCO/ECO or STAX, is applicable to added land.
• A new field was added to allow the user to indicate if the SE or ME options are applicable to the ECO Coverage when they are both elected on the base coverage
• If ECO is elected on the base coverage along with SE or ME, this field will display to allow the user to indicate if the grower has also elected SE or ME on the ECO coverage.

To support ECO, the detail line functionality has been updated to work similarly to SCO. For ECO child lines, the System will create an ECO child line when planted acres greater than 0 are keyed to the base coverage detail line.

NOTE: This includes creating ECO child lines for uninsurable acres and copying the non-premium AR code from the parent line.

Any changes made to an existing base coverage line will be pushed to the ECO child line.

If SE is also elected on both the base and ECO coverage, the System will also create an ECO + SE child of child line

The optional unit, enterprise unit, and prevented plant logic do not include ECO child lines acres when determining if OU applies.

A Related Coverage field displays to allow users to indicate whether a related coverage exists for the selected APH’s coverage and if STAX, ECO, and SCO

If SCO, ECO, and a related STAX coverage are all elected on the coverage, the System will display radio buttons with the following options:

• SCO & ECO: If the user selects the SCO & ECO radio button, the System will create SCO & ECO child lines when acres are keyed to the parent line.
• STAX: If the user selects the STAX radio button, the System will invoke existing logic that creates STAX detail lines when acres are keyed to the parent line.

If ECO and a related STAX coverage are elected on the coverage and SCO is not elected, the system will display radio buttons with the following options:

• ECO: If the user selects the ECO radio button, the System will create ECO child lines when acres are keyed to the parent line.
• STAX: If the user selects the STAX radio button, the System will invoke existing logic that does the following creates STAX detail lines when acres are keyed to the parent line.