Supplemental Coverage Option (SCO)
Supplemental Coverage Option (SCO) is a federally subsidized crop insurance endorsement that can be added to eligible underlying crop insurance policies. SCO is an area-based plan, meaning a payment may only be triggered when the county yield or revenue, (depending on the coverage provided by your underlying policy), falls below the SCO guarantee.
How Does SCO Work?
The SCO endorsement can be added to eligible underlying policies including Yield Protection (YP), Revenue Protection (RP), Revenue Protection with Harvest Price Exclusion (RP-HPE), and Actual Production History coverage when revenue protection is unavailable. When you add SCO, it will follow the type of coverage provided by the underlying policy. If you select Yield Protection, SCO provides yield-based coverage; If you select Revenue Protection or RP-HPE, it will provide revenue-based coverage. As a federally subsidized program, SCO is subsidized at 80% across all coverage levels.
If SCO triggers, your payment amount is calculated using information from your individual crop insurance policy, including approved yield, insured acres, share, coverage selections and applicable price.
Contact us to Learn More about Supplemental Coverage Option:
SCO coverage begins where your underlying policy coverage ends. For example, if you had a RP 75 underlying plan, You may select SCO to provide county-based coverage between 75% and a selected coverage level of up to 90%. (This is up from 86% last year due to changes from the One Big Beautiful Bill Act!)
It is important to remember that SCO is based on county results; a payment may be triggered when the county experiences a qualifying yield or revenue loss-even if your individual operation does not.
How Does SCO Benefit Me?
SCO is designed to help cover a portion of the gap between your underlying policy coverage and a selected SCO coverage level up to 90%. It provides federally subsidized county-based “shallow-loss” protection against qualifying yield or revenue losses. As an area-based endorsement, SCO also has automatic claims processing. This means that the SCO endorsement does not need an adjuster as part of the indemnity process.
Previously, producers could not purchase SCO for acreage enrolled in ARC (an FSA program). However, under the One Big Beautiful Bill Act, you may now elect ARC and purchase SCO for the same acreage. This provides you with more options to customize your risk management strategy to your operation’s specific needs.
To learn if SCO is a good fit for your operation, make sure to consult with your crop insurance agent.
EXAMPLE
Growers APH: 195
County Trend Line Yield: 190
Actual County Yield: 183
Spring Price: $4.62
Harvest Price: $4.00
SCO Coverage Level: 75% – 86%
Expected Crop Value: $ 900.9/ac
Growers APH (195) x Projected Price ($4.62)
Expected County Revenue: $877.8/ac
Trendline Yield (190) x Projected Price ($4.62)
Actual County Revenue: $732/ac
Actual County Yield (183) x Harvest Price ($4.00)
Indemnity Per Acre: $23.51/ac
Expected Crop Value (Coverage Level – Actual County Revenue / Expected County Revenue)
Formula Only: $900.9(86% – $732/$877.8) = $23.51/ac
