Crop Insurance: Breaking Down The Enhanced Coverage Option
By Gary Schnitkey, Nick Paulson, Krista Swanson
Department of Agricultural and Consumer Economics
ECO triggers payments when county average revenue (yield) falls below 90% or 95% of expected county revenue (yield). Expected revenues (yields) at the county level are defined the same way as other existing area-based products. The 90% or 95% coverage level is elected by the producer. ECO coverage extends from the elected coverage level down to 86% of expected revenue or yield for the county.
Payments are then based on the individual’s insurance liability. The county loss, measured in percentage points, up to a maximum of 9%, is multiplied by the individual’s expected insured value per acre to calculate the ECO indemnity payment.