The USDA Risk Management Agency (RMA) increased the 2025 premium support rate for the Enhanced Coverage Option (ECO) from 44% of the total premium to 65%. This will result in farmers paying less for 2025 premiums.

Crop insurance premium subsidies offset part of total premium costs to encourage use. ECO pays out when county revenue falls below the county guarantee. Premiums and payment calculations are based on the farm’s Trend-Afjusted Actual Production History (APH).

Even though increased premium support rates lower premiums, the overall loss ratio is not affected. Loss ratios across all states were lower than the target, with the lowest average loss ratio of .29 in Wisconsin and Nebraska reporting the highest at .69.

When considering ECO as a risk-management strategy, there are a few things to consider:

  • ECO payments for corn have been historically higher than for soybeans in the Midwest.
  • Payment frequency and revenue levels increase at a 95% coverage level/ In Illinoise, 85% of crops covered using ECO were insured at the 95% level.
  • No Supplemental Coverage Option (SCO) is required to use ECO. ECO policies at 90% or 95% coverage levels will pay out before the SCO triggers indemnities.

Read more about increased premium support for the Enhanced Coverage Option here.