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Actions aim to broaden farmers’ insurance options

Issue Date: April 21, 2021
By Dave Kranz

As farmers and ranchers in fire-prone regions of the state struggle to find insurance for their businesses and properties, the California Farm Bureau has pursued a two-pronged approach to providing new coverage options.

"Farmers and ranchers from around the state have told us they have been unable to renew insurance and have not been able to find replacement coverage," California Farm Bureau President Jamie Johansson said. "This has been a top priority for Farm Bureau this year and we've approached it in several ways, including sponsoring legislation and working with our insurance partners at Nationwide."

The legislation, Senate Bill 11 by Sen. Susan Rubio, D-Baldwin Park, would specifically authorize the state's insurer of last resort, the California FAIR Plan, to underwrite insurance coverage for commercial farms and ranches.

The FAIR Plan—FAIR is an acronym for Fair Access to Insurance Requirements—provides basic property insurance for customers who have found themselves unable to acquire coverage in the open insurance market.

Robert Spiegel, a California Farm Bureau policy advocate, said that unlike homeowners and other commercial property owners, farming and ranching operations don't have access to basic property insurance provided by the FAIR Plan.

"If a farmer is unable to find insurance on the private market and lives on the farm, the FAIR Plan is only authorized to underwrite coverage on the home," Spiegel said. "That's a big problem, and that's what we're trying to fix."

Under current circumstances, farmers and ranchers unable to purchase coverage on the open market—and ineligible for the FAIR Plan—could be left without coverage for barns, other outbuildings, equipment and other property needed for agricultural production. In turn, Spiegel said, that could leave them unable to qualify for credit needed to operate the farm or ranch.

SB 11 would correct the exclusion by providing FAIR Plan insurance for agricultural property used in production of an agricultural commodity. The legislation received unanimous support from the Senate Insurance Committee earlier this month, and next advances to the full Senate.

"The FAIR Plan isn't the long-term solution or a substitute for farmers' insurance issues, but does address the most pressing need," Johansson said.

Because the FAIR Plan provides only the most-basic coverage, he said, farmers and ranchers would still need supplemental coverage once they qualify for FAIR Plan policies.

"As a result of the Farm Bureau partnership with Nationwide," Johansson said, "we were able to work with Nationwide to determine how to fill in the gaps of what a FAIR Plan policy would offer."

Following approval from the California Department of Insurance, Nationwide has begun offering what's known as a "difference in conditions" or DIC policy for farmers and ranchers who qualify for FAIR Plan coverage.

Emily Berrier, Nationwide Agribusiness associate vice president of farm underwriting, said Nationwide is the first farm-and-ranch carrier to offer the DIC coverage in California.

"When a farmer or rancher obtains coverage with the California FAIR Plan, they can then work with a Nationwide-appointed insurance agent to submit an application for a difference in conditions policy," Berrier said. "The FAIR Plan and difference in conditions policies then work together to provide coverages typically offered under a Farmowners policy."

She said Nationwide "worked hand in hand" with Farm Bureau to design the coverage and gain state approval.

"This was a joint effort aimed at ensuring the needs of farmers are met," Berrier said.

In a related development, Farm Bureau welcomed a notice from state Insurance Commissioner Ricardo Lara, directing insurance companies to provide data about the availability of commercial coverage for farms, ranches and a variety of agricultural businesses.

Given the number of farmers and ranchers who have reported difficulty in purchasing wildfire insurance, Johansson said, the commissioner's action "should help us determine the breadth and depth of the problem."

Lara directed insurance companies to provide data about the availability of commercial insurance for businesses including farms, ranches, timber harvesting operations, wineries, cotton gins and other agricultural businesses. He gave the companies until June 14 to submit the information.

In an open letter to business owners, Lara said the requested data would include "the number of commercial policies written and non-renewed since January 1, 2017, in order to gauge the impact of four successive fire seasons on commercial insurance coverage in our state."

He said he had also directed insurance companies to provide "any new or recently revised wildfire underwriting restrictions that they intend to implement that would affect this critical sector of California's economy."

Johansson said Farm Bureau has been working with Lara and insurance companies to "stabilize the insurance market" for California farms and ranches.

"We believe the commissioner's action will help us move toward a long-term solution," he said.

(Dave Kranz is editor of Ag Alert. He may be contacted at

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.

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