Commentary: Farmers continue the fight for access to insurance

By Peter Nissen and Ryan Klobas 

In 2021, the Napa County Farm Bureau was gratified to see the passage of Senate Bill 11—Farm Bureau-sponsored legislation that began to seriously address the issue of the lack of wildfire insurance availability for agriculture in Napa County and in fire-prone regions across California.

In Napa County, we took up the fire insurance cause after we began to see our Farm Bureau members—winegrape growers, winery operators and other farmers and ranchers—lose their wildfire coverage through policy cancellations. Following devastating wildfires in our county in 2020, insurers in the admitted market began pulling away from our area en masse.

Before passage of SB 11, farming and ranching operations did not have access to basic property insurance provided by the California FAIR Plan, the state’s insurer of last resort. That left commercial agricultural infrastructure, wineries, farming equipment and other components uninsured. SB 11 authorized these operations to access the California FAIR Plan for basic property coverage and provide a necessary property insurance backstop for agricultural infrastructure.

The passage of SB 11 was the culmination of months of hard work by the Farm Bureau to address the wildfire insurance issue, and it has produced real, tangible results for hundreds of farms around California. However, the work continues, and at Napa County Farm Bureau, we have made this issue a top priority and continue to work to produce real results for our members as opposed to simply talking about the issue.

In Napa County, there are a number of Farm Bureau members who continue to experience problems with wildfire insurance. For those agricultural businesses that have been able to maintain insurance through the private market, members have seen their premiums triple or quadruple on average for a mere fraction of the coverage they once had.

In May 2021, the Napa County Farm Bureau brought California Insurance Commissioner Ricardo Lara to Napa Valley and hosted a forum for him with Farm Bureau members who were directly impacted by the lack of wildfire insurance. We heard from a number of member wineries, vineyards and other agriculture operations that struggled to find any appropriate coverage.

The passage of SB 11 was a start to address the wildfire insurance issue, and Farm Bureau’s work continues on this issue to produce results for our members.

Senate Bill 505, by Sen. Susan Rubio, D-Baldwin Park, is current Farm Bureau-sponsored legislation that would expand the FAIR Plan “clearinghouse” to commercial insurance policies so that residential and commercial policies covering property on the same parcel can both move out of the FAIR Plan and back to the competitive insurance market altogether. This is an important bill that would positively impact farms and agricultural businesses in Napa Valley and other California regions.

In March, Napa County Farm Bureau President Peter Nissen testified before the Senate Insurance Committee on the current state of the coverage market and the ongoing challenges and opportunities that we see. President Nissen testified that a number of Farm Bureau members want to see improvements in the way the FAIR Plan is currently structured, noting that many businesses in Napa County are now choosing to self-insure—those that can afford it.

Self-insuring agricultural businesses are having to invest hundreds of thousands of dollars installing water pumps and generators. They are undertaking defensible space measures and even developing their own brigades to respond to red flag fire alerts.

After the Senate Insurance Committee hearing, we were very pleased to see Lara announce that the California FAIR Plan Association has agreed to more than double its existing commercial coverage limits to $20 million for businesses unable to find coverage in the traditional insurance marketplace.

Still, there is no guarantee that wildfire insurance policies are going to come back into the admitted market. And that’s the goal: getting back to the admitted market to cover risks on millions of dollars of exposure in physical property and personal property, residential and commercial. While improving the ability for farmers to be fully protected inside the FAIR Plan would be an important goal, equally as important is returning policies to the admitted market.

As we continue to address the issue of wildfire in Napa County, we will continue to make wildfire insurance a top priority for our agricultural members and work to produce tangible results. This issue is a great example of why a county Farm Bureau exists. We are a public policy organization with expertise in addressing these types of problems—and finding real legislative solutions for our members.

(Peter Nissen, president of Nissen Vineyard Services, is president of the Napa County Farm Bureau. Ryan Klobas is CEO of Napa County Farm Bureau. They may be contacted at rklobas@napafarmbureau.org.)