California Farmers Struggle for Wildland Fire Insurance Coverage

In 2019, Tawny Tesconi, executive director of the Sonoma County Farm Bureau, began hearing from members struggling to obtain home and fire insurance coverage. Farm, vineyard and ranch owners say they have been abandoned by longtime insurers, and having to go to the open market to find a new plan, plans that tended to be twice as expensive with much lower coverage.

As wildfires continue to ravage California every year, the problem has only worsened. “Our farmers, wineries and producers are very vulnerable,” Tesconi says. “The conversation is now a lot over” I was canceled. I went to the open market. I called every insurance broker I know of. And there is nothing there for me.

Hundreds of farm owners in California are scrambling to find wildfire insurance coverage right now. Some have seen their rates triple or quadruple for a fraction of the coverage they once received. Many have received letters indicating that their policies are not being renewed. “There isn’t a single insurance company that cancels insurance or totally increases premiums beyond a farmer’s ability to pay. It’s at all levels, ”explains Tesconi.

The current reality is “directly the result of the increase in wildfires that we have in the state of California,” says Robert Spiegel, a lobbyist for the California Farm Bureau Federation, the state’s largest agricultural organization. represents around 30,000 family farmers across 56 different counties. Spiegel traces the beginning of the insurance problem back to 2017, the time of the most destructive wildfire season on record in California, which was quickly overtaken by the 2018 season. Insurance companies took a back seat. blow from these forest fires, lose a total of $ 20 billion in 2017 and 2018—Twice the profits of the industry since 1991.

Although farmers invest time and money to make their properties less prone to fires by clearing brush and trees and installing sprinkler systems, insurance companies are still canceling their policies. “It seems a lot of people do it more by zip code than by individual properties,” Tesconi explains. “We think it is somewhat unfair that a landowner who has gone the extra mile and taken the extra steps is not given any consideration.”

Beyond the obvious risk of having uninsured assets, many producers depend on bank loans for the capital they need to afford their equipment, goods and crops. These loans require proof of insurance, as do all state and federal grant programs. It’s a Catch-22, Tesconi said. “It leaves these farmers, ranchers and wineries almost in default on these loans because they can’t provide the insurance because they can’t even get the insurance,” she says.

To help protect California farms from future wildfires and provide some relief, Gov. Gavin Newsom signed Senate Bill 11 (SB-11) July 23. Legislation makes farms, ranches, and winemakers eligible to insure their buildings through the California Fair Access to Insurance Requirements Plan, or FAIR Plan. Previously, the law excluded agricultural properties, leaving commercial agricultural infrastructure, wineries and farm equipment without much need.ed blanket.

Designed as an option of last resort, the state-run program does not provide optimal coverage for everyone. For example, coverage does not extend to crops and livestock, or the equipment used to transport the goods. »The FAIR plan is minimalist to protect structures against fire, lightning, or wind. And that’s it, ”says Spiegel. “Ultimately, for California agriculture, and for our members, SB-11, is a step in the right direction for what was needed it was necessary[to] to fix.”

A major problem is that insurance of last resort is not yet available to farmers and ranchers, and this will not be available until the end of October at the earliest. The California FAIR Plan Association has 90 days to submit all appropriate documents to the California Department of Insurance, at which time farms will have the option of purchasing insurance through a broker. In the meantime, this puts uninsured farmers at risk during an already active wildfire season in the midst of severe drought.

“Even though the SB-11 has passed, even though the governor has signed it, and although one day this insurance will be available to add stakeholders, it is not available today,” Tesconi said. . “So, there are people who are kind of caught in this lame duck time.

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Justin D. O'Neill