Supplemental Coverage Option (SCO)
Supplemental Coverage Option (SCO) is a federally subsidized crop insurance endorsement that attaches to your underlying MPCI policy. SCO is an area based plan, meaning a loss is only triggered when there is a county level decline in yield and or revenue.
How Does SCO Work?
The SCO endorsement can be added to your underlying policies such as Yield Protection (YP), Revenue Protection (RP), Revenue Protection with Harvest Price Exclusion (RP-HPE), and when RP is not available, you can attach it to an Actual Production History policy. When you add SCO, it will follow the coverage of your underlying policy. If you select Yield Protection, SCO provides yield-based coverage; If you select Revenue Protection, it will provide revenue-based coverage. As a federally subsidized program, SCO is subsidized at 80% across all coverage levels due to recent changes from the One Big Beautiful Bill Act.
SCO’s coverage starts just above the underlying coverage. For example, if you had an RP 75 underlying plan, You could choose to use SCO to cover any level of remaining coverage up to a total of 86% coverage.
It is important to understand that SCO is an area based endorsement, meaning that whether a payment is triggered or not is completely determined at the county level.
While individual yield or revenue does not determine whether an SCO claim is trigged, Your guarantee is still based on your individual Actual Production History (APH). This determines the amount of payment you may receive if SCO triggers.
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How Does SCO Benefit Me?
SCO is designed to fill the coverage gap between your underlying policy and the higher coverage levels. It provides affordable county-based “shallow-loss” protection. As an area-based endorsement, SCO also has automatic claims processing, meaning indemnities within the SCO coverage band can trigger without the need for an adjuster.
In previous years, producers would need to choose between ARC and SCO, as SCO was not allowed if ARC was elected through the FSA office. ARC, being a free program, often made SCO less attractive for many operations. However, recent legislative changes from the One Big Beautiful Bill Act now allow SCO to be paired with ARC. With SCO subsidized at 80%, it has become a much more attractive option that can complement ARC when it fits your operation.
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
