The study analyzed the physical and financial performance of a new crop insurance scheme namely PradhanMantri Fasal Bima Yojana (PMFBY) in H-K region.The study revealed that the coverage of farmers under PMFBYincreased by 8 per cent and area insured decreased by 3.72 per cent between kharif 2015 and kharif 2016 in Karnataka.Overall, the performance of PMFBY in Karnataka during the year 2016-17 revealed that there was an increase of 77.20 percent in number of farmers insured and an increase in area insured by around 65 per cent from 2015-16 to 2016-17. Further,there was an increase of around 41 per cent in farmers insured and around 50 per cent in area insured from kharif 2016 tokharif 2017 in Karnataka. However, the trend was opposite in H-K region as there was a 5.84 per cent decrease in farmerscovered and 3.69 decrease in area insured. The overall claims to premium ratio was less than unity 0.99 and 0.64 inKarnataka and H-K region, respectively during kharif 2016, implying PMFBY was financially viable. Multi picking andpaddy rice issues add upto 94 per cent of the total pending claims in Karnataka during kharif 2016. Overall, in spite ofimproved performance of PMFBY compared to previous years, only 29 per cent of the net sown area of Karnataka wasinsured during the year 2016-17. Thus, to make PMFBY more effective it is suggested to provide premium discounts forgroup coverage of farmers and also to consider a change in claims settlement mechanism at state level with customergrievances cell which would bring in more farmers under crop insurance.Key words: Crop insurance, Crop yield, Farm income, Fasal Bima Yojana