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22-20660

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

POST-APPLICATION COVERAGE ENDORSEMENT (PACE)

(This is a continuous endorsement. Refer to section 2 of the Common Crop Insurance Policy Basic Provisions.)

In return for the payment of the administrative fee and premium for the coverage contained herein, the Post-Application 

Coverage Endorsement (PACE or Endorsement) will be attached to and made part of the Common Crop Insurance Policy 

Basic Provisions (Basic Provisions) and the Coarse Grains Crop Provisions, subject to the terms and conditions 

described herein. The Endorsement provides supplemental coverage for non-irrigated corn when a producer plans on postapplying nitrogen but is physically prevented from doing so in accordance with these provisions.

1. Applicability

(a) This Endorsement operates only in those 

counties where coverage for the insured crop is 

offered in the actuarial documents.

(b) You must have the Basic Provisions and Coarse 

Grains Crop Provisions in force to elect this 

Endorsement.

(c) Your underlying insurance policy must be Yield 

Protection, Revenue Protection, or Revenue 

Protection with Harvest Price Exclusion.

(d) You must elect this Endorsement in writing, by 

unit, on or before the sales closing date for the 

underlying insurance policy if you wish to insure 

your split nitrogen application under this 

Endorsement. 

(e) Except when in conflict with this Endorsement, all 

provisions of the Basic Provisions and the Coarse 

Grains Crop Provisions apply.

(f) Prevented planting acres are not eligible to be 

insured under this Endorsement. This 

Endorsement applies only to insured planted 

acres which are planted within the planting dates

specified in the actuarial documents.

(g) You are not eligible for this Endorsement if you 

have elected Catastrophic Risk Protection

coverage.

(h) To be eligible for coverage, you must purchase 

this Endorsement from the same insurance 

provider that provides you the underlying 

insurance policy.

(i) Acreage designated by FCIC with a high-risk

classification is not insurable under this 

Endorsement.

(j) Only non-irrigated corn is insurable under this 

Endorsement.

(k) If you elect this Endorsement, all insurable 

acreage within the unit(s) you elect under the 

Coarse Grains Crop Provisions must be insured. 

You can choose to insure some units and not 

others, but within an insured unit you must insure 

all acres, unless those acres are uninsurable or 

uninsured or do not qualify for coverage under this 

Endorsement. For example, if there are 100 

insured acres in an insured optional or basic unit 

on the underlying insurance policy, and PACE is 

elected on that optional or basic unit, all 100 acres 

must be insured under this Endorsement.

(l) Notwithstanding 1(k), if you have historical records 

at the basic unit and/or optional unit level (as 

applicable) sufficient to calculate an approved yield 

on such units, then you may elect PACE on an 

optional or basic unit basis if your underlying policy 

uses enterprise, enterprise by practice, or whole 

farm units. In addition, you may elect optional units 

for PACE if your underlying policy uses basic units. 

(m) You may elect PACE coverage on some eligible 

units and not others, provided sufficient records 

exist to fulfill the requirements of Section (1)(l), but 

you must elect PACE on all units where the postapplication nitrogen practice is used on a majority 

of the acreage in the unit when optional or basic 

units are elected for PACE. 

(n) If you do not declare PACE insured units on or prior 

to the sales closing date, all eligible acres and units 

on the underlying policy will be insured and 

premium will be due on such acres, even if the final 

post-application percent is deemed to be zero 

percent.

2. Definitions

Actual planting date – The date that planting is 

completed on the acreage for the insured crop.

Actual nitrogen applied per acre – The average rate 

of nitrogen applied on PACE loss acres, measured in 

pounds per acre, before or at time of planting.

Declared post-application percent – The percent of 

nitrogen you intend to apply after planting that must be 

a value between 25 percent and 80 percent, stated in 5

percent increments. 

Final PACE loss factor – If your actual nitrogen applied 

per acre on any PACE loss acres is less than the 

maximum nitrogen per acre multiplied by the pre-apply 

percent, then the final PACE loss factor equals your 

preliminary PACE loss factor. If your actual nitrogen 

applied per acre on any PACE loss acres is greater than 

the result of maximum nitrogen per acre multiplied by 

the pre-apply percent, then the final PACE loss factor 

will be equal to the PACE loss factor corresponding to 

your final post-application percent as published in the 

actuarial documents. If the final post-application percent 

is less than twenty five percent, then the final PACE loss 

factor will equal zero.

Final post-application percent – If your actual 

nitrogen applied per acre on any PACE loss acres is 

less than the maximum nitrogen per acre multiplied by 
(2 of 4)

the pre-apply percent, then the final post-application 

percent equals the declared post-application percent.

Otherwise, the final post-application percent will equal 

one minus the actual nitrogen applied per acre divided 

by the maximum nitrogen per acre, rounded down to the 

nearest 5 percent increment; unless that calculated 

amount is less than zero, then the final post-application 

percent will be zero. For example, suppose that the 

maximum nitrogen per acre is 200 lbs./acre, the 

declared post-application percent is 25 percent, and the 

actual nitrogen applied per acre is 180 lbs./acre on 

PACE loss acres, then the final post-application percent 

will be equal to (1 – 180 / 200) = 10 percent.

Insured acres – The acres of the crop for each insured 

unit you elect under this Endorsement.

Maximum nitrogen per acre – The maximum amount 

of nitrogen to be applied to the insured crop for the 

growing season on the insured acres, equal to 1.2 

pounds multiplied by your approved yield and 

expressed in pounds per acre. This quantity is 

determined by us and is presumed accurate.

Nitrogen stress – Stress that occurs to the insured crop 

caused by lack of nitrogen when it is needed by the plant 

resulting in a yield decline for the insured crop.

PACE coverage level percent – An election made by 

you between 75 percent and 90 percent stated in 5

percent increments for coverage under this 

Endorsement.

PACE insured unit – A unit as elected by you from 

insured units specified by your underlying insurance 

policy to be covered under this Endorsement. 

PACE loss acres – The land upon which you are 

physically unable to post-apply nitrogen due to an 

insurable cause of loss. The PACE loss acres may be 

less than the total insured acres in the unit.

PACE offset – An adjustment made to a claim payment 

under this Endorsement in the event an indemnity

payment is also owed to you on your underlying

insurance policy, and the payment under this 

Endorsement exceeds the deductible on your 

underlying insurance policy as outlined in section 11(d).

PACE premium rate – The premium rate in the 

actuarial documents corresponding to your declared 

post-application percent for the state, county, and 

insured crop covered by the underlying insurance 

policy.

Pre-apply percent – Percent of the total amount of 

nitrogen you intend to apply before or at the time of

planting; equal to one minus declared post-application 

percent. Pre-apply rate and declared post-application 

percent must add up to 100 percent.

Preliminary PACE loss factor – The percent 

estimated yield decline in the event you are prevented 

from post-applying nitrogen due to a covered cause of

loss, established based on your declared postapplication percent, as published in the actuarial 

documents for your state, county, and insured crop.

Post-application window – The time period in which 

the post-application of nitrogen would normally be 

applied as published in the actuarial documents. To 

account for in-season climatic events, the postapplication window can be moved forward or backward 

up to the amount of variance published in the actuarial 

documents, in accordance with the PACE loss 

adjustment standards handbook.

Prevented post-application – The physical inability to 

apply nitrogen during the post-application window due 

to an insured cause of loss.

Underlying insurance policy – A plan or plans of 

insurance covering the insured crop for which this 

Endorsement is elected consisting of the Basic 

Provisions and Coarse Grains Crop Provisions

published at 7 CFR Part 457, and either Yield 

Protection, Revenue Protection, or Revenue Protection 

with Harvest Price Exclusion.

Split application – Application of nitrogen in two or 

more steps: before and/or during planting; and after 

planting.

3. Insurance Guarantees, Coverage Levels, and Prices 

for Determining Indemnities

(a) You must report the declared post-application 

percent on your application.

(b) In lieu of section 2(b)(4)(I) of the Basic Provisions, 

you may select a PACE coverage level percent that

is different than the one selected for your underlying

insurance policy.

(c) The projected price and harvest price applicable to 

this Endorsement will be established according to 

sections 3(c) through 3(e) of the Basic Provisions.

4. Contract Changes

The contract change date will be in accordance with 

section 4 of the Basic Provisions.

5. Cancellation and Termination Dates

(a) This Endorsement may be cancelled in accordance 

with the Basic Provisions section 2, and Coarse 

Grain Crop Provisions section 5. 

(b) If at any time your underlying insurance policy is 

cancelled or terminated, this Endorsement is 

automatically canceled or terminated as of the 

same date. 

6. Report of Acreage

In addition to the provisions in section 6(c) of the Basic 

Provisions, your acreage report must include, by insured 

unit:

(a) The intended total nitrogen application rates for 

both pre-apply and post-apply;

(b) The actual total nitrogen application rates for both

pre-apply and post-apply;

(c) The number of acres in each unit in which a splitapplication practice was used; and

(d) The actual planting date for each unit.

7. Insurance Period

In lieu of section 11 of the Basic Provisions, the 

insurance period begins on the calendar date stated in 

the actuarial documents that corresponds to the start of 

the post-application window and ends on the calendar 

date in the actuarial documents for the end of the postapplication window, subject to the variance window.

8. Causes of Loss

(a) In addition to section 12 of the Basic Provisions, 

insurance under this Endorsement is provided only 

against the actual physical inability to post-apply 

nitrogen during the insurance period, due to

insurable causes of loss specified within the 

underlying insurance policy.

(b) This Endorsement does not cover mechanical 

failure of equipment unless the failure, breakdown,
(3 of 4)

or inability is specifically due to an insured cause of 

loss. 

(c) You must take reasonable efforts to limit the PACE 

loss acres.

9. Exclusions

Insurance is provided only to protect against 

unavoidable naturally occurring events. All other causes 

of loss, including, but not limited to, the following, are 

excluded:

(a) Failure to follow recognized good farming practices 

for the insured crop;

(b) Fertilizer price risk;

(b) Application of nitrogen after the post-application 

window on insured acreage; and

(c) Any other exclusions identified in the underlying 

insurance policy that are not in conflict with this 

Endorsement.

(d) Supply chain disruptions or inability to purchase 

fertilizer, equipment, or services.

10. Premium

(a) Your premium due will be calculated by:

(1) Multiplying the PACE premium rate by your 

insured planted acres in a PACE insured unit;

(2) Multiplying the result of (1) by your approved 

yield;

(3) Multiplying the result of (2) by your share;

(4) Multiplying the result of (3) by your PACE

coverage level percent;

(5) Multiplying the result of (4) by your preliminary 

PACE loss factor;

(6) Multiplying the result of (5) by the projected 

price; and

(7) Multiplying the result of (6) by the difference of 

one minus the subsidy percent identified in the 

actuarial documents.

(b) In the event your final post-application percent is 

different than your declared post-application 

percent, the premium amount will not be reduced

or increased. Your premium will be calculated 

based on your declared post-application percent, 

not your final post-application percent. The 

declared post-application percent must be declared 

by the sales closing date.

(c) The administrative fee for this Endorsement is 

determined in accordance with the provisions in 

section 7(e) of the Basic Provisions.

(d) Premium will be charged on all acres in a PACE 

insured unit where the crop is eligible even if the 

final post-application percent is deemed to be zero 

percent on any given acreage in the unit. In the 

event a unit contains acreage that is not eligible, 

those acres that are not insurable will be excluded 

from PACE coverage, and no premium will be due 

on those acres.

11. Settlement of Claim

(a) When you submit a notice of loss, you must 

provide:

(1) Purchase receipts or similar documents that 

show your name, the date of purchase, the 

type of fertilizer purchased, the brand name (if 

applicable), the nitrogen, phosphorus, and 

potassium content, and the total amount of 

fertilizer purchased. 

(2) Contemporaneous records showing each date, 

location, number of acres that the pre-planting 

fertilizer was applied, the rate of application, 

the brand name, the nitrogen, phosphorus, 

potassium content, and the total amount of 

fertilizer applied; and

(3) Other information as requested by us which 

may include fertilizer application and spraying 

maps, evidence of split application nitrogen 

plans or prescriptions, and/or evidence of 

nitrogen stress to the insured crop.

(b) We will determine your loss on a PACE insured unit 

basis. A PACE loss is only paid on affected PACE 

loss acres within a PACE insured unit, therefore the 

unit structure does not change the total indemnity 

payment on insured acres.

(c) In addition to the settlement of claims provisions in 

the underlying policy, we will determine the 

indemnity under this Endorsement by:

(1) Multiplying the final PACE loss factor by your 

approved yield;

(2) Multiplying the result of (1) by your PACE loss 

acres;

(3) Multiplying the result of (2) by your PACE 

coverage level percent;

(4) Multiplying the result of (3) by your share; and

(5) Multiplying the result of (4) by the greater of the 

harvest price or projected price.

(d) The amount of indemnity payment owed under this 

Endorsement may be reduced by a PACE offset in 

the event an indemnity payment is also owed to you 

on your underlying insurance policy and the 

indemnity calculated in (c) above exceeds the 

deductible on your underlying insurance policy.

Whether a PACE offset is required and how it is

calculated is as follows: 

(1) Multiplying your approved yield by the number 

of insured acres; 

(2) Multiplying the result of (1) by the greater of 

the projected price or harvest price;

(3) Multiplying the result of (2) by your share;

(4) Multiplying the result of (3) by the deductible 

percent of your underlying insurance policy;

and

(5) Subtracting the result of (4) from your PACE 

indemnity.

(6) If the result of (5) is greater than zero, and 

your underlying insurance policy has paid an 

indemnity on those PACE loss acres, then the 

PACE offset is equal to the lesser of (5) or the 

indemnity on your underlying insurance 

policy.

(7) Subtract any PACE offset from the PACE 

indemnity calculated under (c) to arrive at the 

payable PACE indemnity.

Examples of Indemnity Calculations

You have a corn Yield Protection underlying plan of 

insurance with this Endorsement. You have 100 acres

in the unit. Your approved yield is 200 bushels per acre

and the projected price determined under the 

Commodity Exchange Price Provisions (CEPP) for the 

underlying insurance policy for corn is $4.00 per 

bushel. You selected a 90 percent PACE coverage

level election and 85 percent coverage level on your 
(4 of 4)

underlying insurance policy. Your share is 100 percent.

The final PACE loss factor is 10 percent. You intend to 

apply a total of 200 pounds of nitrogen and your 

declared post-application percent is 40 percent. The 

harvest price is less than the projected price.

Example 1:

You are physically prevented from post-applying 

nitrogen during the post-application window due to 

weather conditions and an insured cause of loss on all 

100 acres. You harvest 180 bushels per acre. This 

exceeds the guarantee on your underlying insurance 

policy (200 bu./acre x 85 percent coverage level = 170 

bushels), so no indemnity is due under the underlying

insurance policy. The PACE indemnity is calculated as 

follows:

(1) 0.10 x 200 bushels = 20 bushels

(2) 20 bushels x 100 PACE loss acres = 2,000 bushels

(3) 2,000 x .90 PACE coverage level = 1,800 bushels

(4) 1,800 x 1.0 share = 1,800 bushels

(5) 1,800 x $4.00 projected price = $7,200 indemnity 

under PACE.

No PACE offset is required.

Example 2:

Same scenario as Example 1, but you harvest 100

bushels per acre and are physically prevented from 

post-applying nitrogen during the post-application 

window. Your indemnity under PACE is $7,200 as in 

the previous example. Your indemnity under your 

underlying insurance policy is:

(1) 100 acres x (200 bushels per acre x 0.85 coverage 

level) = 17,000 bushel guarantee

(2) 17,000 x $4.00 projected price = $68,000

guarantee

(3) 100 bushels x 100 acres = 10,000 bushels

production to count

(4) 10,000 bushels x $4.00 projected price = $40,000

(5) $68,000 - $40,000 = $28,000 underlying 

insurance policy indemnity

To determine the PACE offset, calculate the difference 

between the PACE indemnity and the value of the 

underlying insurance policy deductible, which is equal 

to 100 acres x 200 bushel approved yield x 0.15 

underlying insurance policy deductible x $4.00

projected price = $12,000. In this scenario, the value 

of the underlying insurance policy deductible is greater 

than the PACE indemnity of $7,200. Therefore, no 

PACE offset is required.

Example 3:

Using the same calculations as provided in Example 2, 

assume that your PACE declared post-application 

percent is equal to 75 percent and your resulting PACE 

loss factor is 20 percent. You harvest 100 bushels per 

acre and have a PACE claim. In this scenario, your 

PACE indemnity will be $14,400. The underlying

insurance policy indemnity remains $28,000. The 

value of the underlying insurance policy deductible 

equals $12,000, which is less than your PACE 

indemnity. Your PACE offset will equal $14,400 -

$12,000 = $2,400. Your final PACE indemnity will 

equal $14,400 - $2,400 = $12,000.

12. Written Agreements

Written agreements that alter the terms of this 

Endorsement are not permitted. Additionally, this 

Endorsement cannot be elected if the underlying 

insurance policy is modified by a written agreement.