Crop Insurance: Why the Rules Changed and Why Your Strategy Should Too
Crop insurance changed this season in a meaningful way. The One Big Beautiful Bill didn’t just adjust subsidy rates—it altered incentives, shifted competitive dynamics among Approved Insurance Providers (AIPs), and opened the door to strategies that simply didn’t pencil out before.
The result?
More options, more complexity, and more opportunity—if you’re willing to revisit your approach.
Image from Real Ag Stock
What Changed
Several rule changes fundamentally reshaped the economics of crop insurance:
Subsidy rates increased significantly on both individual and county-based plans
SCO is no longer tied to ARC or PLC elections (we’ll save the 2026 Farm Program election for another day)
Together, these changes dramatically improved the value proposition of county-based coverage—especially at higher coverage levels like ECO 95%.
Why County Coverage Now Matters More
County-based policies (SCO and ECO) now play a central role in risk management decisions due to:
Much higher subsidy levels (often near 80%)
Larger payouts relative to premium cost, driven in part by higher expected county yields for many crops and regions
The key consideration is correlation:
When your county’s yield or revenue goes up or down, does your farm generally move in the same direction—and by a similar amount?
If the answer is “mostly yes,” ECO 95% becomes very difficult to ignore under current pricing.
The Role of Private Offsets / Buy-Ups
AIPs have responded to this new environment with private Offset or Buy-Up products, typically structured as:
95% Revenue or Yield coverage
Triggered on an individual basis, often at the Optional Unit level
Designed to work alongside SCO and ECO
These products aren’t necessarily new, but higher subsidies, increased competition among AIPs, and a tougher farm economy have changed the dynamics around how—and when—they make sense.
This structure gives farmers the best of:
A county-level payout from ECO 95%, or
An individual-level payout from a 95% offset
The result is a meaningful reduction in deductible exposure and improved protection against farm-level losses—even in years when the county performs reasonably well.
Rethinking Wind and Hail Coverage
With 95% effective coverage on an individual revenue basis, some operations may no longer need separate wind or hail policies—especially given that many hail policies already carry a 5% deductible.
In some cases, dropping hail coverage can help fund the offset buy-up, resulting in:
Broader protection
Fewer coverage gaps
Similar—or even lower—total cost
(This requires proper Farmowners Farm Blanket coverage for grain in storage.)
Cost Impact: Knox County, IL Corn Example
230 BPA APH
2025 Structure:
RP 85% + ECO 95% + Hail/Wind
Total Cost: ~$64/acre
2026 Structure:
RP 85% + ECO 95% + 95% Offset (No Hail)
Total Cost: ~$35/acre
That difference is driven almost entirely by new subsidy dynamics, not reduced coverage.
**Quoted figures subject to change and for illustrative, conceptual discussion only**
Bottom Line
There is no universal “best” structure. Correlation, geography, unit structure, and risk tolerance still matter.
But one thing is clear:
The rules have changed.
If you’re using the same crop insurance strategy you used a year or two ago, odds are it’s no longer optimal. Now is the time to re-evaluate how individual policies, county coverage, and private buy-ups fit together under the new subsidy framework.
If you need help making sense of it all, our crop insurance experts, Kyle Adams and Andrew Bowman, are happy to give a free risk analysis – call or email today.
Kyle - 270.348.2151 | kadams@codakgroup.comAndrew - 309.368.3544 | abowman@codakgroup.com
Andrew Bowman
General Manager - Insurance| Market Advisor, Central Midwest
A former client turned Market Advisor, Andrew, oversees Illinois and the surrounding region. He also leads the CODAK Insurance Group, integrating crop insurance into our clients’ marketing strategies. His focus is on helping clients make confident decisions, gain peace of mind, and protect their working capital.
Connect with AndrewKyle Adams
Crop Insurance Expert | Market Advisor, Eastern Corn Belt
With more than a decade of experience as a crop insurance agent, Kyle integrates our marketing strategies with crop insurance products to maximize both sets of tools, creating a well-rounded risk management program for our clients.
Connect with Kyle