Napa wineries and others hard-hit by massive wildfires in California’s wine country and elsewhere will soon be able to tap into the state’s insurance plan of last resort, officials said Friday.
Hundreds of farmers, ranchers, wine growers and other outdoor businesses that were previously ineligible for coverage will be eligible starting Feb. 1 under the California FAIR Plan, formally the California Fair Access to Insurance Requirements Plan.
Insurance Commissioner Ricardo Lara on Friday approved the new farm coverage, which was initially authorized under legislation last year backed by the California Farm Bureau, California Association of Winegrape Growers and the Wine Institute.
That will “add much-needed protection for those farmers and ranchers that have found their insurance policies canceled or non-renewed,” said farm bureau president Jamie Johansson. “Given the current wildfire challenges facing California, our agricultural community is fearful of what may happen this year without this additional coverage.”
The approval will let plan administrators finalize the details needed to insure farm properties, a process California FAIR Plan President Anneliese Jivan said should be completed by Feb. 1.
That will allow farmers who are unable to obtain property insurance from other insurers buy basic fire insurance through the FAIR Plan. The plan is an insurance pool established by law in 1968 and funded by private insurance companies to cover those in wildfire-prone areas who otherwise can’t get coverage because the risk is too great.
To speed things up, Lara approved the plan but identified some additional coverage issues that he said the plan must resolve in coming months to make sure it “truly takes all comers.”
Just since 2018, California has had more than 32,700 wildfires that destroyed more than 38,400 structures and burned more than 13,220 square miles (34,239 square kilometers).
Among vulnerable areas are California’s more than 25 million acres (10 million hectares) of farmland.
The Glass Fire roared through the hills of Napa and Sonoma counties in the heart of Northern California’s wine country in 2020, and what started as a wind-fueled rural fire in 2017 quickly leveled entire residential blocks of homes in the city of Santa Rosa.
The Glass and a second fire that burned through Napa County in 2020 caused more than $175 million in agricultural-related damages, including agricultural infrastructure losses exceeding $35 million, according to a legislative analysis.
Such risks can make agricultural businesses uninsurable through traditional coverage, which in turn carries impacts even if the properties survive, according to the farm bureau.
Without insurance, the agribusinesses can’t qualify for financial credit. And many farmers rely on large loans to pay for planting the year’s crop, paying it back after harvest. They often use the farm itself as collateral.