Supplemental Coverage Option (SCO) Insurance
What is the Supplemental Coverage Option (SCO) Insurance?
The Supplemental Coverage Option (SCO) insurance policy option is a county-level revenue-based or yield-based optional crop insurance endorsement that provides additional coverage for a portion of your underlying crop insurance policy deductible.
SCO Crop Insurance
SCO insurance can be elected only when a producer has purchased one of the following underlying plans of crop insurance:
- Yield Protection
- Revenue Protection
- Revenue Protection with the Harvest Price Exclusion
- or to the Actual Production Historypolicy for crops that don’t have revenue protection available.
The Federal Government pays 65% of the premium cost for SCO.
How Do I Buy SCO Crop Insurance?
Producers can choose SCO as an endorsement to the underlying policy. This choice must be made by the sales closing date for your underlying policy, and it needs to be with the same insurance company. Any crop on a farm that has been elected to participate in the Agriculture Risk Coverage (ARC) program at Farm Service Agency (FSA) is not eligible for SCO coverage.
Contact your trusted ProAg agent today to discuss policy details and availability.
How Does SCO Insurance Work?
SCO follows the coverage of the underlying policy. If Yield Protection is chosen, then SCO covers yield loss. If Revenue Protection is chosen, then SCO covers revenue loss.
The amount of SCO coverage depends on the liability, coverage level and approved yield for the underlying policy. However, SCO 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 there is an individual loss in yield or revenue. SCO pays a loss on an area basis, and an indemnity is triggered when there is a county-level loss in yield or revenue.
SCO crop insurance indemnity payments are determined by county average revenue or yield and are not affected by whether you receive a payment from your underlying crop insurance policy. It is possible to experience an individual loss but to not receive an SCO payment, or vice-versa.
The dollar amount of SCO coverage is based on the percent of crop value covered. SCO also allows producers to customize their amount of coverage with a coverage percentage. The coverage percentage is elected from a range of 50% to 100%, and the maximum amount of SCO coverage is multiplied by that percentage.
What Happens if I Elect SCO and Signed Up for ARC?
If a producer elects SCO and ARC for the same crop on their farm, SCO coverage for that crop on that farm will be cancelled and the producer must report the crop on that farm covered by ARC on their acreage report. If they do not report a farm covered by ARC, the acreage of that farm will be ineligible for an SCO payment. On top of the ineligibility, the producer will still owe 60% of their SCO premium on that crop and farm to cover administrative expenses. The underlying policy will remain in effect.
Still Have Questions?
Learn more from RMA’s SCO fact sheet here and then contact your trusted ProAg agent to discuss policy details and availability.
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